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LIVE ON THE CRASH: Expert Panel

BlodgetShiller2.pngThe crash continues to roll from one market to the next, and huge new bailout talks are underway. We're analyzing this morning's events live, and we'd love you join us (see rules below). By popular demand, we've stayed live all day.

7:32
Joe Weisenthal:  This is gonna be a fun one.
7:33
[Comment From Henry Blodget] 
Branson just blamed "a few people" for whole mess. Bankers, regulators.
7:34
Henry Blodget:  Wilbur Ross fires back: UK consumer even more indebted than US consumer (POW!)

7:36
Henry Blodget:  Morgan Stanley reeling: Fate in hands of Mitsubishi, debt about to be downgraded: http://www.clusterstock.com/2008/10/morgan-stanley-down-on-moody-rating
7:36
Joe Weisenthal:  per CNBC: Equity trading halted in Russia, Austria, Icleand, Romania, Ukraine, Indonesia. 
7:37
Joe Weisenthal:  Bush is talking at 10:25. Hopefully he isn't getting any wise ideas about doing something similar.
7:37
Henry Blodget:  Branson: Stock market screwed for quite a while.   Hopefully not Japan.   [Let's hope not: 18 years after Japan peak, market trading at 1/4 of bubble peak.   That would be 3000 on the DOW in 2026
7:38
Henry Blodget:  Oil down to $83
7:39
Henry Blodget:  Branson will go back into mortgage business in six months (after bailing 6 months ago).  
7:39
[Comment From J. Tang] 
Libor OIS getting wider at 365, TED @ 421. Treasury repos failing, wailing and gnashing of teeth. Also, Lehman CDS settles at 2:00 PM
7:39
Henry Blodget:  Spreads widening even with new talk of interbank lending guarantee? Ouch
7:44
[Comment From Liz] 
This slow motion crash is worse than just getting it over with in one day -- I think the 7-days and counting aspect has people even more scared than they otherwise would (and should) be. Like pulling off a band-aid...
7:44
[Comment From J. Tang] 
From Bespoke: http://bespokeinvest.typepad.com/bespoke/2008/10/world-equity-ma.html Since last October, equity markets have lost 26 trillion. Ow.
7:44
[Comment From R Williams] 
Can you have market capitulation when markets are shut!!!
7:44
Henry Blodget:  [Private Message to J. Tang] Your comments will now be published automatically.
7:45
J. Tang:  [Private Message to Henry Blodget] Thanks  (Reply Privately)
7:47
J. Tang:  A pity the market won't just catastrophically crash so we can start from scratch. Maybe if the Lehman CDS settlement is a disaster we'll have the big one.
7:47
Henry Blodget:  [Private Message to J. Tang] Thank you! Great stuff
7:47
Joe Weisenthal:  I hate to even use the word "capitulation" but when you see healthcare stocks and their ilk taking it on the chin, as they did yesterday, you have to wonder.
7:49
J. Tang:  But the equity markets still seem to be more positive then the credit markets. Looks like the credit markets are waiting for the end of days.
7:52
Henry Blodget:  One glimmer of hope: The rhetoric is now an inch away from Armageddon. CNBC trader just saying upside "if you have a 20-30 year holding period"
7:53
J. Tang:  http://www.isda.org/2008lehmancdsprot/docs/Lehman-Plain-English-Summary.pdf Direct link to the "Plain English" summary of the upcoming Lehman settlement. 2:00 PM we'll get some solid numbers. They're running out of places to put boxes for people on CNBC
7:54
Henry Blodget:  If we're Japan, he's wrong: Need even more time. If we're any other market in history, however, recovery will be far quicker than that.   Goldman has nice study on market recoveries after onset of financial crashes. Usually takes about 2-2.5 years: http://www.clusterstock.com/2008/10/good-news-stocks-do-eventually-recover-after-financial-collapses
7:55
Henry Blodget:  @ J Tang...can you describe this Lehman CDS settlement briefly?  
7:56
J. Tang:  From my understanding, they're basically going to determine how much CDS sellers are going to have to pay out. Here's a bloomberg article about the prospects: http://bloomberg.com/apps/news?pid=20601087&sid=aX_FLjiKfbic&refer=home
7:57
Henry Blodget:  Home beer-brewing equipment sales up in crappy economy: http://www.news.com.au/business/money/story/0,25479,24446556-5017313,00.html
7:59
[Comment From Timothy Sykes] 
one of you guys should come on my show LiveStock later today at 1PM, Mogulus live streaming video, Broadway and Bleecker, we've got about 200 regular vieewers, today it's just gonna be awesome so I want 1,000+...make carney do it, I even made him a special t-shirt to have him come on! Call my cell 407-716-4422
8:00
Henry Blodget:  DOW: Worst seven days in history.   Wow.
8:04
Henry Blodget:  Macy's slashes same-store sales estimate...   now down 3-6%
8:04
[Comment From Stanley Steamer] 
Weak retail news continues....
8:04
[Comment From Stanley Steamer] 
DJ 8:01 *DJ Macys Y-T-D Same-Store Sales Down 3.2%>M
8:08
[Comment From misstrade] 
Where's the Bottom?
8:08
[Comment From misstrade] 
GE net down 22% and new 10 year lows, that's more telling to this market right now to me.
8:09
Joe Weisenthal:  GOOG below $320. 
8:09
Joe Weisenthal:  Guy on CNBC says the goal should be to prevent financial meltdown from "spreading to the real economy". Good luck with that, my friend.
8:09
J. Tang:  Baltic Dry Index has fallen off a cliff, Great stuff from Yves: http://www.nakedcapitalism.com/2008/10/international-trade-seizing-up-due-to.html
8:10
[Comment From misstrade] 
20% shutdown on NYSE is about 6800
8:10
[Comment From Peter Kafka] 
GE results preannounced so no news there
8:10
Henry Blodget:  [Private Message to Peter Kafka] Your comments will now be published automatically.
8:11
J. Tang:  Well one possible plus side is that the stock sell off maybe from everyone getting enough cash to cover the Lehman settlements. If we're lucky, once that blows over, things will be slightly less awful
8:11
Joe Weisenthal:  @J. Tang. Good catch on Baltic Dry Index.
8:13
[Comment From misstrade] 
solution is right here, http://misstrade.wordpress.com/ just need a leader, too bad we don't have one after 8 years of this mess
8:16
J. Tang:  On another plus side, its hard to imagine sentiment getting much worse
8:17
Henry Blodget:  GM still saying bankruptcy not an option...until 2009
8:17
J. Tang:  They're probably right. Bankruptcy looks pretty mandatory to me
8:19
Henry Blodget:  Gasparino: Morgan Stanley trying PR offensive...   still saying Mitsubishi deal going through (supposed to close Tuesday). If it doesn't, firm likely toast (in my opinion)
8:19
Henry Blodget:  Blasting Moodys for sandbagging them on ratings downgrade
8:19
[Comment From Stanley Steamer] 
GM's announcement - said another way: "We're solvent for at least 81 more days!"
8:21
J. Tang:  Why would MUFJ pay 25 bucks a share at this point in time? Also, the credit rating agencies picked a fine time to really play hardball
8:22
Henry Blodget:  Agree re Mitsubishi. There has to be a "material adverse change" clause in there that they can fall back on.   Not that Morgan Stanley will have anything left to sue them with if they pull out
8:25
J. Tang:  At least we know that the Fed & Treasury won't let Morgan die. Maybe MUFJ will just buy all of Morgan. Its the 80's all over again
8:30
Joe Weisenthal:  Courtesy of J. Tang's link http://www.clusterstock.com/2008/10/credit-freeze-slams-global-trade
8:31
[Comment From Hatch] 
Have to ask a sort of silly question: Should we expect to see US markets react less, same, or more to a poor early start in other markets?
8:33
[Comment From mj] 
How much closure will the Lehman auction bring? how long will it be until the losers and the size of their losses are well known?
8:33
[Comment From Jim Cramer Jr.] 
I still do not get it. Why not just let them crash if we have already gotten this far. I work in local government and we have about a $100 million account with a failing bank. Its 100% secure.
8:33
[Comment From Stanley Steamer] 
Interesting: SPX Dividend yield is 3.33% - getting very close to the 10year yield of 3.8%.
8:33
[Comment From Stanley Steamer] 
From David Lutz, "Even my wife and her friends are driving around listening to CNBC. When the public is nervous and running in one direction – I want to go the other way"
8:33
Joe Weisenthal:  I've noticed that the "market is crashing cause of fear over Obama" meme is spreading.
8:34
Henry Blodget:  Yes. Unbelievable. Stock markets have done better historically under Democratic presidents. This is pure Karl Rove
8:34
[Comment From Bob] 
Ratings Agencies: are they reliable? are they acting responsibly?
8:34
Henry Blodget:  [Private Message to Stanley Steamer] Your comments will now be published automatically.
8:34
J. Tang:  @ mj I don't think anyone is sure. All we're going to learn at 2:00 PM is how much CDS sellers have to pony up
8:35
Joe Weisenthal:  I'll concede that it doesn't help the market to have two candidates loudly trying to out-populist each other when it comes to Wall St. It'll be a good thing once this is over.
8:35
[Comment From AGORACOM] 
Gentlemen, do we see a big sell-off today ahead of long weekend?
8:35
[Comment From AGORACOM] 
Investors are panicked and paralyzed - but why don't we see more talk about how to profit from further erosion in the markets. S&P puts? Gold? There are plenty of ideas when markets are green but why the lack of ideas when the market is red?
8:36
J. Tang:  McCain wants to what, nationalize all mortgages? Who was the socialist again?
8:36
Joe Weisenthal:  Right.
8:37
[Comment From mj] 
@jtang. sort of. we learn the prices at 2pm, but do we know the exposures today? if i'm reading your earlier link correctly, cash settlement isn't until the 21st, right?
8:37
[Comment From Hatch] 
Are you looking forward to the live chat on gold bubble deflation in 2012?
8:38
J. Tang:  @ mj Yep. But if counterparties have to pay (say) 85 cents on the dollar, I imagine people are going to get very, very, very nervous
8:39
J. Tang:  @ Agoracom S&P Puts are probably going to be stupid expensive (though I guess historical volatility is currently higher then implied). Treasuries can't really get much cheaper. The big question is do you think its going to get any worse?
8:43
[Comment From mj] 
MS now < 9
8:43
[Comment From AGORACOM] 
I think it gets much worse. You have "Fast Money" panelists saying they have no reason to buy here and suggesting govt begin buying futures with taxpayers money. As such, I don't see where the buying comes from.
8:44
Henry Blodget:  Morgan Stanley fate in Mitsubishi hands. And I just don't see why Mitsubishi won't walk: http://www.clusterstock.com/2008/10/morgan-stanley-ms-fate-in-mitsubishi-hands
8:44
Henry Blodget:  Or at least demand completely different terms.   If deal falls through, I think Treasury will have to step in.
8:45
J. Tang:  Even if the treasury steps in, I don't see how they do anything but force MS to take the deal. They probably have enough headaches as is.
8:48
J. Tang:  @ mj yeesh, MS is a dead man walking
8:48
[Comment From DK] 
Thank god for MS otherwise the sharks would be going for C
8:50
J. Tang:  http://www.reuters.com/article/marketsNews/idINN1036237720081010?rpc=44 the cost to insure MS debt is now 28% upfront. Sure looks like they're toast
8:50
Joe Weisenthal:  Crazy to think that a few weeks ago, they were talking about MS looking to Wachovia for a lifeline.
8:52
J. Tang:  Wonder if Goldman will fall too
8:53
[Comment From JVMIII] 
Imagine if you're one of the brokers who left Merrill to go to MS, since they looked like an independent survivor? Ouch.
8:53
[Comment From Hatch] 
Now that GM is hinting around bankruptcy, how long until Chrysler, Dodge, Jeep, and Ford follow suit? It's not like they are bastions of strong financial perforrmance.
8:53
[Comment From John] 
Bush should just give us all a holiday from this disaster on Monday
8:53
[Comment From mj] 
buffett's investment not looking quite so rosy this morning....
8:54
Henry Blodget:  No.   But he has preferred stock and a 10% coupon.   So common goes to zero before he loses
8:55
J. Tang:  @ Hatch Actually I think that the auto companies might even benefit from Chapter 11. Gives them some time to really get their act together. I would not want to be Cerberus right now.
9:10
[Comment From Guest] 
Morning guys...any chance the $22 YHOO proposal will put the stock in the green today??
9:10
[Comment From Guest] 
Is this a good time to buy for a long term investment of say a 10 year horizon?
9:10
[Comment From McRib@$.99] 
Hey guys, what do you think about Constelllation Energy, CEG? The thing is trading under $24 but there is an agreement with Buffet to buy the thing out at $26.5 & a French company offering upwards of $30. Seems like a pretty big merger-arb spread considering Buffet doesn't back out once he's committed (as far as I can remember). Is it just the current market or am I overlooking something? Throughts/
9:10
[Comment From Guest] 
I would expect from demographic trends and from long term secular trends that asia would soon provide a good investment opportunity
9:10
[Comment From raj] 
Heny, any chances Mack will run to Pandit for help?
9:10
[Comment From McRib@$.99] 
Are quotes on Yahoo Finance broken?
9:11
Henry Blodget:  Re Yahoo, I doubt it.   The investor pushing for a sale, Mithras, has no power.   And more importantly, you need a buyer.
9:12
Henry Blodget:  White House: Don't get hopes up. Bush not going to say anything important at 10:25
9:13
Henry Blodget:  Presidential "reassurances" are a part of every market crash. They never work.   The difference here is that Bush has stopped saying "the fundamentals are sound." Which gives you an idea of how bad things are.
9:16
Henry Blodget:  Re Morgan Stanley running to Citi for help: I don't think Citi CAN help. I suppose they have some flexibility after getting jilted by Wachovia, but Meredith Whitney and others were shocked that they wanted to take that one on.   With government help, maybe.   But you're talking about another crash weekend deal, and Citi's lawyers certainly wont make mistake they made last time.   Morgan's fate in Mitsubishi hands, I think
9:17
J. Tang:  Its a really odd situation. A lot of people are expecting SOME sort of bounce, but no one really wants to be the person who sticks their foot in the pool
9:17
[Comment From NJR] 
Stock futures down 390+ points
9:18
[Comment From McRib@$.99] 
NM re: the Y!Finance...it is working now. Hopped over to Google Finance in the interim. I need to get used to it but they do have a pretty neat free screener: http://finance.google.com/finance/stockscreener#c0=MarketCap&min0=4209&max0=353200000000&c1=PE&min1=0.21&max1=4154&c2=DividendYield&min2=0&max2=379&c3=Price52WeekPercChange&min3=-99.81&max3=727&region=us&sector=AllSectors&sort=&sortOrder=
9:18
[Comment From misstrade] 
oil 79's so we got that going for us!! Long is wrong any asset class
9:19
[Comment From J. Perenack] 
Does anyone have detail on the rumours about a G7 package to be announced today/this weekend?
9:20
Henry Blodget:  Here are some links to latest US/UK bailout news: http://www.clusterstock.com/2008/10/world-markets-smashed-massive-new-bailout-talks
9:20
[Comment From gman] 
Henry, what are you betting on for tomorrow (2009)? Inflation or deflation?
9:21
Henry Blodget:  I'm in Roubini camp on inflation: Given collapse in commodity prices, unlikely to be a problem next year.   After that, though, given MASSIVE increase in money, et al, wouldn't be surprised to see it become major problem.  
9:21
[Comment From Noblow] 
I'd be very much interested in how long the GOOG bubble will be able to persist. I think that the stock could be heading right to 200 over the next few days.
9:22
Henry Blodget:  Still think GOOG a bubble?   On cash flow, starting to get pretty reasonable
9:23
[Comment From Noblow] 
Yep. One product only, heavily depending on consumer spendings. And then they haven't got their spendings under control. (YHOO is probably way ahead of this. :-)
9:23
J. Tang:  Wouldn't its cashflow numbers be misleading depending on how badly advertisers get mauled in the coming recession? Don't really follow the stock closely.
9:24
Henry Blodget:  Yes, that is true re spending.   They do have a lot of operating income to work with, but agree that firings and other cuts not inconceivable.
9:25
Henry Blodget:  Morgan Stanley and Goldman critical today: MS now at $9, down 30%. GS at $80, down nearly 20%.   This is worse than the levels that triggered the first huge bailout leak at few weeks ago
9:25
[Comment From Noblow] 
GOOG + firings = mass exodus of talent = end of bubble
9:27
[Comment From McRib@$.99] 
Re:Google, I think the macro factors re: internet growth around the world & emerging mediums will keep the CF machine going albeit at decreased growth rates. All that cash has become more valuable each day this week relative to other assets. I firmly believe they'll see 1000/share before 2012
9:27
[Comment From Noblow] 
Anyway, great new format. Congrats. See you at the end of the tunnel. ;-)
9:27
[Comment From McRib@$.99] 
Finally, GS is cracking!!! Ugh, about time.
9:27
Henry Blodget:  Latest from Merrill's strategist Richard Bernstein (who is excellent):  

Key Points:

- Although the Fed and the Treasury have certainly made gallant efforts to solve the credit crisis, we suggested that the markets’ performances were suggesting that monetary solutions alone can not solve the problem. It is not 1998. We have progressed beyond a global credit crisis. This is now a global economic crisis. One should not expect the financial markets to perform well until we see coordinated fiscal solutions.

- Investors should not expect the credit-driven stories of the past 5-10 years (like China, emerging markets, residential real estate, commodities, energy, hedge funds, and private equity) to resume their leadership. We think the new leaders will come from defensive, relatively cash flow stable sectors like Consumer Staples and Health Care, from very high quality bonds, like Treasuries and GNMAs, and from developed markets, like the US and Japan.

9:28
Henry Blodget:  More Bernstein:

-When to Get Bullish
We have previously outlined the indicators we will be using to identify when to alter our conservative views and turn more bullish. Specifically, there are four indicators we will be watching: Sentiment, valuation, estimate revisions, and initial jobless claims. Two are slowly improving (sentiment and valuation), but unfortunately two are still in danger territory (estimate revisions and jobless claims).

Investors should remain patient.

-It is important now for investors to remain objective. Capitalism, although clearly quite sick right now, will survive and will eventually again prosper.

9:34
J. Tang:  Pity. I was looking forward to opening up my GS checking account too. Just to throw it out there, the last remaining "Mae", Sallie, is getting clobbered. Its technically private, but I wonder if the government would bail them out too
9:41
[Comment From McRib@$.99] 
Not sure what it mean but a bit strange
9:41
[Comment From John J] 
These are unusual times, cannot be measured by standard yardsticks would you agree?
9:41
[Comment From Foster] 
Did the equipment freez up or is everyone watching the opening?
9:41
[Comment From John J] 
economic cycles have to run their course...messing with them will create new dislocations
9:41
[Comment From Hatch] 
@ J - good point. I was surprised to hear they did not get rolled into the first round of saving.
9:41
[Comment From McRib@$.99] 
-1,000 Thank god for the folks who engineered DOG...gott love the ultrashort ETFs :)
9:41
[Comment From Stuart Davidson] 
re: Sallie - maybe the gov't lets them go. the replacement already exists, in the form of the direct lending program. why not, the feds are already lending to everyone else? all SLM does is add a layer of costs and bureaucracy.
9:41
[Comment From McRib@$.99] 
So my latest CA Muni bond reset at 8.5%...wowzers. This one is backed by the revenue generating LA transit system. CUSIP: 54471RCF2
9:43
Henry Blodget:  Haines is correct: Real problem is not liquidity...it is banks hoarding cash (certainly can't blame them for it).   This is why critical to force writedowns and recapitalize
9:43
[Comment From Stuart Davidson] 
@McRib - L.A. has a transit system? who knew?
9:45
[Comment From McRib@$.99] 
LOL Stuart...enjoy: http://www.metro.net/default.asp
9:45
Henry Blodget:  DOW rallying nicely off lows.
9:45
[Comment From Hatch] 
Why can't central banks and other regulators offer a period of amnesty? In other words, why cant they just say, "You get 30 days to get in order and take your writedowns. If you bite the bullet, we'll help you without damages. If you don't and things go down later, then you better hope you look good in orange."
9:49
John Carney:  I increasingly think that more write downs are absolutely necessary to get the banks to lend again. No financial institution trusts any other because they all know they are holding bad paper at inflated price.
9:50
Henry Blodget:  That's right.   And no investor will go near banks because of threat of getting immediately sandbagged.
9:50
[Comment From McRib@$.99] 
Yahoo in the green...woohoo!
9:50
[Comment From Guest] 
Why are C and JPM relatively stable while the others tank?
9:50
[Comment From Foster] 
Henry@,, A local regional banker told me they have been directed to go after deposits and for get loans. They don't have any intention of lending right now unless forced to.
9:51
Henry Blodget:  Love those "oversold" and "overbought" assertions.   Give me a break
9:51
[Comment From McRib@$.99] 
Foster...which bank? Or at least the state?
9:51
[Comment From Hatch] 
Right. So, aside from being chicken****, why won't central authorities force the hand a little?
9:52
Henry Blodget:  New euphemism: "Times of confusion."   Um, would that be "times of panic and global market and economic collapse"?
9:52
[Comment From Guest] 
JC - I agree with you. Why are we continuing to believe the fevered minds in DC have come up with solutions that have escaped better minds for a quarter century of markets?
9:52
[Comment From Stuart Davidson] 
Carney - maybe I'm missing something here, but for the banks to take writedowns, they need to know what level to write down to, right? Doesn't that mean that someone has to go first? And no one wants to go first and risk getting pounced on by sharks/shorts/vultures/whomever? So what incentive is going to be necessary to compel the banks to do this?
9:52
[Comment From EconAnalyst] 
Weisenthal's article about shipping just scared the hell out of me.
9:52
[Comment From Foster] 
Georgia
9:52
[Comment From Foster] 
McRib@ Big regional
9:52
[Comment From McRib@$.99] 
Folks, don't forget the market mints millionaires on the way down just like it does on the way up.
9:53
Henry Blodget:  Yes, and right now they have the good sense to keep quiet about it.
9:53
Henry Blodget:  Here's Joe's shipping post referenced above: http://www.clusterstock.com/2008/10/credit-freeze-slams-global-trade
9:54
[Comment From Rellag] 
sorry - hit return early. My point is, bankruptcy exists with its provisions to write down assets, and re-equitize the company through restructuring the debt, b/c it works. And has worked for hundreds of years. There's no chapter in the finance books about TARPs for a reason.
9:54
Henry Blodget:  Yes....converting bank debt to equity also makes great deal of sense.   Hard to do in blanket fashion, though.
9:54
[Comment From mohawkTrail] 
How would the small investor respond to the situation as opposed to a large institutional investor. For instance, does the large investor have the option to get all out?
9:54
[Comment From angelo] 
on the border with mexico, peso has gone from 10 to 14 to 1, mexican market down and many of the mexican maquiladoras have reduced work.
9:55
[Comment From Joe Garland] 
It's taken hits the last few days, but why is HSBC doing relatively well?
9:55
[Comment From Jeremy] 
Huge opportunity right now if you're buy and hold...and sane....and ballsy.
9:55
[Comment From Garcon] 
I agree...bankruptcy also allows banks with strategies to grow and acquire the over leveraged at a discount...good morning all
9:56
John Carney:  I just noticed the "Bush speaks" clock on the bottom of the screen on CNBC.   What on earth can he possibly think he will say that will help things?
9:56
Henry Blodget:  Nothing: They've already preannounced that he won't say anything.
9:57
Henry Blodget:  Just the usual presidential jawboning: Remain calm, all is well. Remain calm, all is well.
9:57
[Comment From McRib@$.99] 
mohawk, small investos usually don't hedge. no risk controal = big problems.
9:57
[Comment From McRib@$.99] 
@John "Victory. We've Bottomed"
9:57
[Comment From Jeremy] 
Please don't let Bush speak...short the Bush speech - guaranteed money maker.
9:57
[Comment From Garcon] 
"no, serisouly guys....just let me have a little bit more money, ohh and by the way can we suspend the markets this afternoon??
9:57
[Comment From Foster] 
HSBC claims to be in great shape and not need and will not take any government assistance.
9:57
[Comment From J. Perenack] 
re: Bush - it will be the typical statement for the sake of making a statement.
9:58
[Comment From Stuart Davidson] 
someone at CNBC needs to nut up and play the Kevin Bacon "remain calm" clip from Animal House
9:59
Henry Blodget:  Here it is:
9:59
John Carney:  Very nice.
10:02
John Carney:  So the VIX is incredibly high: is this a contrary indicator? All the traders I talk to figure that it indicates panic at this level, which should mean we're near a bottom. Of course, as I said yesterday, just because you're panicking doesn't mean you aren't screwed.
10:02
[Comment From Garcon] 
hilarious...
10:02
[Comment From McRib@$.99] 
Later SAI gang...off to the gym. I promise not to punch any banking Execs. who maybe working on their abs.
10:02
[Comment From Garcon] 
is there any market phenomenon that can explain 200 point swings as such seen at the end of every trading period this week??? massive sell offs, but why at the end of day?
10:02
[Comment From Foster] 
Before Monday we will hear from everyone, the IMF is getting vocal, the G 7 is meeting, the Treasury and Fed will be on every program that will have them, the Pres. , congressional leaders, everyone that anyone thinks can slow the decay. If there is a trick left in the bag you will see if this weekend.
10:02
[Comment From R Williams] 
Trading halted on DIA diamonds .Why?
10:04
Joe Weisenthal:  Phew. Glad to see the economy didn't die completely while riding the subway.
10:04
John Carney:  Indeed. People keep on getting and doing and making things.
10:05
[Comment From Foster] 
Oh, Lord. that aint good.
10:06
[Comment From Anil] 
By CAPE measure, is S&P undervalue @ 800+ as it had gone below 900 now ?
10:06
Henry Blodget:  Yes...CAPE puts fair value at about 900...   Fair value for the first time since 1992
10:07
Henry Blodget:  Given complete collapse of Japan and Europe, US behavior very encouraging
10:07
[Comment From Stanley Steamer] 
DJ 10:05 PRESS RELEASE: WebMD Reports Strong Online Advertising Sales Growth
10:07
[Comment From Stanley Steamer] 
WebMD stated that it expects its third quarter financial results to be at the low end of its prior financial guidance.
10:07
J. Tang:  But weren't the last two routes last trading hour type affairs?
10:07
Henry Blodget:  WebMD: Nice headline.   Talk about misleading.
10:07
[Comment From Anil] 
WoW, that means we r near bottom but how much that we need to probablisie
10:08
Henry Blodget:  Lots of folks just shaken out.  
10:09
Joe Weisenthal:  You guys see the NYPost cover today?
10:09
Henry Blodget:  No...please post
10:09
[Comment From Jay Yarow] 
In RE: People getting along just fine, if bloggarts and news folks weren't writing all caps headlines pronouncing the end of the world, I don't think the majority of people would have any idea that there is a problem.
10:09
Henry Blodget:  [Private Message to Jay Yarow] Your comments will now be published automatically.
10:10
[Comment From Walter Boldys] 
This weekend the wealthy countries will be compelled to guarantee all of the obligations of their banks. Is there anything else they can do?
10:10
Joe Weisenthal:  Hmm, it doesn't seem to be online. Will look for it.
10:10
Henry Blodget:  Yes.   They can guarantee all bank deposits to stop bank runs
10:10
[Comment From Steve] 
Is it possible we are going to have another last minute selling frenzy today? 14:00 - 16:00 is going to be a dicey time frame.
10:10
[Comment From Foster] 
@ J. Tang,, Yes the closing moments seem to get us, and this is friday on a bad week.
10:11
J. Tang:  @ steve, yeah after 2 is gonna be scary
10:11
Joe Weisenthal:  Thanks Eric!

10:12
[Comment From Garcon] 
why though??? what expectations are driving those last 10 min.
10:12
[Comment From Steve] 
ohh, and just how correct has N. Roubini been through all this? That guy is frightening with his accuracy. I hope that the G7 players listen very closely to him this weekend.
10:12
Henry Blodget:  Yes...he will scare the crap out of them
10:13
J. Tang:  @ garcon Lehman CDS at 2, and depending on what source you read, some people think the last minute crashes are due to mutual fund redemptions.
10:14
[Comment From Stuart Davidson] 
god bless the Post
10:14
J. Tang:  although, we technically won't know till the 21st (settlement date) who (if anybody) is screwed
10:14
[Comment From Steve] 
He scares the crap out of me already, lol.
10:14
[Comment From Tim A.] 
If these guarantees do not work, and these new bailouts fail to curtail the panic, the US treasury will default due to the trillions we throwing out the window... If that happens we will no longer be able to buy oil and other commodities... we will be FUBAR
10:14
[Comment From Anil] 
http://faculty.chicagogsb.edu/luigi.zingales/Why_Paulson_is_wrong.pdf
10:15
J. Tang:  If the UST defaults, the whole world will be FUBAR
10:15
Henry Blodget:  Yes, originai Paulson plan massively flawed. Current one--buying equity--is the right one.
10:15
[Comment From Foster] 
@Garcon, Fear usually plays a part.
10:17
[Comment From Anil] 
why dont congress call roubini also for his opinion ?
10:17
[Comment From Tim A.] 
I hope it works, we were in the middle of a private equity transaction for one of my companies the week we lost the first 800-900 points. Needless to say I am not sure if it will get done this year...
10:18
Henry Blodget:  Hearing lots of anecdotes like that: investors who have committed pulling back before actually delivering the cash.
10:20
Henry Blodget:  The closing hours will be very important, I think. If market closes up, people will spend weekend thinking we've hit bottom.   If we have another end of day crash, mom and pop will panic over the weekend and follow Cramer's recommendation to get the hell out
10:20
[Comment From J W] 
AIG under 1.2 today ?
10:21
Henry Blodget:  Re AIG: It's at $2, which in my opinion is $2 too high.   Govt just had to pump an additional $38 billion in.   Taxpayers should now own whole thing.
10:21
[Comment From Steve] 
What is the point of Bush speaking this morning? I cant see how it will accomplish anything. His approval rating is at 32% and congress was at 17% - I dont think the people have much faith in our politicians at this point, and Bush speaking seems like a waste of valuable G7 meeting time.
10:22
Henry Blodget:  Maintaining fiction that someone is listening to him.
10:22
John Carney:  I have to say, this clock is kind of ridiculous. What if Bush is late? ow do you time a president to the 10 of a second? A hundreth?
10:23
Henry Blodget:  Dick Hoey optimistic governments will act this weekend and break spiral.   (ie, guarantee interbank lending and deposits, announce huge fiscal stimulus).  
10:23
Joe Weisenthal:  i've thought about that.
10:23
[Comment From Foster] 
Listening to who?
10:23
[Comment From Stuart Davidson] 
Bush is speaking because that's what presidents are supposed to do. Leadership function. Think of it this way; how would Main Street view it if he stayed quiet?
10:23
Henry Blodget:  [Private Message to Stuart Davidson] Your comments will now be published automatically.
10:23
[Comment From Eric] 
RE: Bush. 32% > 0%. Some people like hearing from him. The remainder are discounting it anyways, so I don't know that there is a negative from hearing from him.
10:24
[Comment From J W] 
What time is lehmans CDS report at
10:24
[Comment From Anil] 
I see Warren Buffet smiling in a photo looking to win either with preferred dividends in GS and GE if liquidation hits or in difference if the stock shoots up !What a smart move ? and he has just reached top pushing gates down.
10:24
[Comment From SMK] 
Every time I hear McCain say he wants to buy mortgages from homeowners I get a little dumber.
10:24
[Comment From Guest] 
Monst things are ridiculous in US-TV ;-). Thanks God we have the internet.
10:24
J. Tang:  @ JW 2 PM. Settlement is on the 21st. Maybe Bush will tell us we're all doomed. THat would be refreshing
10:24
Stuart Davidson:  [Private Message to Henry Blodget] Thank you sir - will do my best to keep up the level of discourse. Like the site and the direction it's headed. The markets...less so.  (Reply Privately)
10:25
Henry Blodget:  [Private Message to Stuart Davidson] Glad to have you!
10:25
Henry Blodget:  I'm encouraged by this market action, have to say.   People may be expecting Bush to actually say something, which White House has already said he won't.
10:25
Henry Blodget:  And here we go...
10:25
Joe Weisenthal:  The man's timing is impeccable... if you're not factoring in months he spent sleeping on this story.
10:26
[Comment From Bob] 
Been buying SPY on the way down (including today) for long term. Am I a fool?
10:26
[Comment From Foster] 
What size is the Lehman CDS redemption?
10:26
[Comment From SMK] 
Bush - "Well, I've started drinking again..."
10:26
[Comment From Garcon] 
the rumor is 400 bill to settle CDS on the Lehman side..
10:26
[Comment From Guest] 
Henry did you see Nouriel's RGE Monitor Alert sent out at 9pm last night?
10:26
Henry Blodget:  No re Nouriel...checking now
10:26
Joe Weisenthal:  Aaand here the market drops on his speech. Down 50 since he stepped up.
10:27
Henry Blodget:  Yes....   holding out hope he would announce something.   Nope.
10:27
[Comment From Garcon] 
dont you feel assured...i swear i heard this last week
10:28
[Comment From Rav] 
This doesn't smell like a real bottom. Too many people calling it. I think the real bottom will be as surprising as the sudden downdraft in the last month.
10:28
[Comment From Bob] 
Can one put lipstick on a lame duck?
10:28
Henry Blodget:  Here's Nouriel's latest.   He's meeting with IMF folks this weekend.:  
Roubini: At this point severe damage is done and one cannot rule out a systemic collapse and a global depression. It will take a significant change in leadership of economic policy and very radical, coordinated policy actions among all advanced and emerging market economies to avoid this economic and financial disaster. Urgent and immediate necessary actions that need to be done globally include:
1) another rapid round of policy rate cuts of the order of at least 150 basis points on average globally;
2) a temporary blanket guarantee of all deposits while a triage between insolvent financial institutions that need to be shut down and distressed but solvent institutions that need to be partially nationalized with injections of public capital is made;
3) a rapid reduction of the debt burden of insolvent households preceded by a temporary freeze on all foreclosures;
4) massive and unlimited provision of liquidity to solvent financial institutions;
5) public provision of credit to the solvent parts of the corporate sector to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses;
6) a massive direct government fiscal stimulus packages that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower income households and provision of grants to strapped and crunched state and local government;
7) a rapid resolution of the banking problems via triage, public recapitalization of financial institutions and reduction of the debt burden of distressed households and borrowers;
8) an agreement between lender and creditor countries running current account surpluses and borrowing and debtor countries running current account deficits to maintain an orderly financing of deficits and a recycling of the surpluses of creditors to avoid a disorderly adjustment of such imbalances.
10:29
Henry Blodget:  Here's link to rest: (top story):     http://www.rgemonitor.com/
10:29
Henry Blodget:  Oh, here we go: It's all the evil shorts fault.
10:29
Joe Weisenthal:  Ooh, he got it right. He said rumor mongers will be "prosecuted". Last time he said "persecuted".
10:30
Henry Blodget:  This wave of prosecutions going to make Enron, et al, look tame
10:30
[Comment From Sidney] 
actually that wasn't the alert sent out at 9pm by Roubini I'll try to find the link to the entire alert
10:30
Henry Blodget:  Thanks, Sidney
10:31
Joe Weisenthal:  Yes, wasn't SarbOx supposed to prevent all this? Can't wait to see what SarbOx2.0 s going to look like.
10:31
[Comment From Steve] 
Do you think it is even possible to accomplish all that in today's political climate? That would take coordination on global scale, and we can even manage a coordinated US response.
10:31
Henry Blodget:  This whole speech is "Here, see what we've done."
10:32
Stuart Davidson:  Jay Leno did a bit last night - Wall Street Crooks Playing Cards. Had DIck Fuld, Sullivan and Willumstad, et al. There's going to be strong support for some perp walks in the near future.
10:32
Joe Weisenthal:  Yep, nothing new.
10:32
[Comment From Jim] 
How can I scroll back through comments?
10:32
[Comment From Foster] 
If the 9pm allert is worse I din't want to see it.
10:32
Henry Blodget:  Okay...here's latest Roubini (thanks, Sidney):

The US and advanced economies’ financial system is now headed towards a near-term systemic financial meltdown as day after day stock markets are in free fall, money markets have shut down while their spreads are skyrocketing, and credit spreads are surging through the roof. There is now the beginning of a generalized run on the banking system of these economies; a collapse of the shadow banking system, i.e. those non-banks (broker dealers, non-bank mortgage lenders, SIV and conduits, hedge funds, money market funds, private equity firms) that, like banks, borrow short and liquid, are highly leveraged and lend and invest long and illiquid and are thus at risk of a run on their short-term liabilities; and now a roll-off of the short term liabilities of the corporate sectors that may lead to widespread bankruptcies of solvent but illiquid financial and non-financial firms.

On the real economic side all the advanced economies representing 55% of global GDP (US, Eurozone, UK, other smaller European countries, Canada, Japan, Australia, New Zealand, Japan) entered a recession even before the massive financial shocks that started in the late summer made the liquidity and credit crunch even more virulent and will thus cause an even more severe recession than the one that started in the spring. So we have a severe recession, a severe financial crisis and a severe banking crisis in advanced economies.

10:33
[Comment From Sidney] 
Not sure if you linked to that article from Barron's a couple weeks back but I thought the article "Other Voices" was a decent list of regulatory changes that contributed to the mess
10:33
[Comment From Sidney] 
click on the text and click your page up or page down button
10:33
[Comment From Neil] 
Sidney - the excerpt Henry posted is from Nouriel's latest. Those are his recommendations at the end.
10:33
[Comment From J W] 
It's funny when he looks down to read, his face is all serious.. but when he looks at the camera he's always got a huge grin on his face.
10:34
Henry Blodget:  And the market says....     GONG!
10:35
Henry Blodget:  Whoah: Lehman CDS auction puts value at 9 cents on dollar.   Think we're going to be seeing some more writedowns
10:36
[Comment From Sidney] 
Also contained in the Roubini alert was this snippet:"At this point the risk of an imminent stock market crash – like the one-day collapse of 20% plus in US stock prices in 1987 – cannot be ruled out as the financial system is breaking down, panic and lack of confidence in any counterparty is sharply rising and the investors have totally lost faith in the ability of policy authorities to control this meltdown."
10:36
[Comment From J. Perenack] 
He said God Bless Me! I feel so reassured.
10:36
[Comment From Garcon] 
the market probably expected someone actual news instead of a reiteration of two weeks of comments
10:36
[Comment From J. Perenack] 
How long until the Sandlers of the world are indicted?
10:36
[Comment From J W] 
his speech is way too long. He should just say don't worry, things are going to work and then leave
10:39
[Comment From Sidney] 
Actually he should probably just announce he's replacing Paulson or Bernake with Roubini(if he's willing)...
10:40
[Comment From Sidney] 
Very good interviews over on Bloomberg with Mark Mobius and Jim Rogers. Both highly respected international investors
10:40
[Comment From Bob] 
W should have had Bobby McFerrin sing "Don't worry, be happy" with him.
10:40
[Comment From Eric] 
what's the deal with MS, other than the Mitsu deal not solving any problems.
10:40
[Comment From J W] 
Where can I find more info about Lehman CDS auction today
10:40
[Comment From Foster] 
If he shortens his speach he doesn't get the chance to wax eloquent.
10:41
[Comment From J W] 
Hopefully after lehman's auction, lending will start up again. I have a feeling that they were waiting for the auction first
10:41
J. Tang:  @ JW, www.creditfixings.com
10:42
Henry Blodget:  FINALLY...a big banker admits mark-to-market accounting fair (Jamie Dimon). Of course, it's in the process of putting all his competitors out of business.
10:45
[Comment From Foster] 
I saw Jim Rogers on at 3:30 this am. His advice is simple. Let the banks market whatever crash and burn and see whats left, we may be doing that anyway.
10:46
Henry Blodget:  He's mostly right.   Don't have to save all of them--just some. I think he is advocating letting them ALL fail, which would smash global economy
10:46
[Comment From Sidney] 
Yes, Jim likes to refer to the 1907 crash were about all the banks went under and the USA still emerged as a major power in the 20th Century.
10:47
J. Tang:  Which wouldn't really help his "Commodity Supercycle" theory or whatever it is
10:47
Henry Blodget:  Of course, it took about 20 years for market to recover (just in time for speculation of 1920s)
10:47
[Comment From J W] 
They should have never let lehman fail. That was really the biggest mistake.
10:48
J. Tang:  Well, it did help blow up moral hazard as a problem
10:48
[Comment From SMK] 
of course, in 1907 J.P. Morgan could oversee basically the entire global economy... now JP Morgan Chase doesn't even know what's on its own balance sheet.
10:49
Henry Blodget:  Yes--good point re JP Morgan.   And, ironically, his bank still occupies similar position. (albeit with less power)
10:49
[Comment From Sidney] 
Jim's point on commodity was about historical supply lines without new sources of supply commodities will have to move up with population driven demand. Not so much a super cycle story but more of an observation that we didn't add new supplies for 20 years...
10:50
J. Tang:  I don't think any single institution is big enough these days to pull a JP Morgan.
10:50
Henry Blodget:  We were going to stop this after Bush speech, but still some great stuff coming in. So we'll keep open until 11:30 ET.   Thanks to all for excellent input.
10:50
Joe Weisenthal:  Just saw a 527 ad on CNBC slamming Dodd over economy, Fannie/Freddy. Merits aside, I just don't see this line of argument resonating and working in the Republicans' favor this year.
10:51
Henry Blodget:  Agreed, Joe.   Everyone has forgotten about Fannie and Freddie.   Too worried about 401ks
10:51
[Comment From Sidney] 
closest thing to JP Morgan now might be the Chinese/Asian sovereign funds
10:52
Joe Weisenthal:  Yeah. It's not necessarily an absurd argument (though I think the Republicans are vastly overstating their efforts at reforming those institutions). But I don't think people can begin to grasp the connection between those firms and the stock market getting slammed today.
10:52
J. Tang:  SWF's aren't do so hot either. Most got creamed when they bought financials earlier, and China may have less money to throw around then people think : http://piaohaoreport.sampasite.com/china-financial-markets/blog/Can-fiscal-spending-save-the-day.htm
10:53
J. Tang:  Republicans seem to have lost the script in general. I can't believe McCain is still going off on Bill Ayers. Maybe the "Markets are Scared of Obama" approach will work better
10:53
[Comment From Sidney] 
But after Singapore/Chinese sovereign funds got burnt on early round funding injections they are gunshy and may wait until absolute bottoms now
10:53
Henry Blodget:  [Private Message to Sidney] Your comments will now be published automatically.
10:53
Stuart Davidson:  FT has a piece on the UK and Iceland getting snippy over who's getting their money back: http://www.ft.com/cms/s/0/213857b8-9649-11dd-9dce-000077b07658.html. Money quote: "Gordon Brown said he would take whatever action was necessary against the Icelandic authorities to recover money for UK citizens. He said Iceland itself had “effectively defaulted” and the events of recent days had been “completely unacceptable”." This does not bode well...
10:53
[Comment From Sidney] 
I meant closest thing to JP Morgon circa 1907
10:54
[Comment From J W] 
China gets too much unfair criticism for everything they've done for our country
10:54
Joe Weisenthal:  I think Obama's "say it to my face" is a great response to the Ayers charge. Cause if McCain does bring it up in the debate, Obama can turn around and say "How does this attack help people may their mortgages?" and make McCain look like a fool.
10:56
Sidney:  I would still like to see Marc Faber vs Roubini on whether rates should be higher(to attract private investment) or lower(to bail out financial institutions)
10:56
[Comment From J W] 
Problem with McCain is that he doesn't have any fight left in him. He's focusing too much on voters who are already voting for him. Obama is just too witty for McCain.
10:57
Sidney:  If low rates didn't work for Japan should we really be assuming Hoover's high rates were THE Problem in the depression?
10:57
J. Tang:  I thought the general consensus was that Hoover basically did everything wrong
10:58
Joe Weisenthal:  Actually, for an event so thoroughly studied by economic historians, it seems like there's a surprising lack of consensus.
10:59
[Comment From DrederickTatum] 
High rates were the problem - the Fed contracted the money supply and exacerbated the depression.
10:59
[Comment From J. Perenack] 
I'd like to see the old, bar room brawling, foul mouthed McCain back for a while
10:59
J. Tang:  True, I guess it depends who you ask. Either way, most people don't think we're going to go through that now.
11:00
J. Tang:  It's a sign of the times that we view a 3% drop in the S&P and the Dow as "not too bad"
11:00
Joe Weisenthal:  yes, that's true.
11:01
[Comment From Dash Chang] 
@Joe. I'm an econometrician. Our models are built on history. With one-off changes, it cannot be modeled. Thus, we are flying on opinion, not facts.
11:04
[Comment From Dash Chang] 
This chat software is too slow to be effective ;-)
11:04
Joe Weisenthal:  Sometimes it takes us a couple of seconds to approve your comments. It's not the software.
11:05
[Comment From J W] 
I think comments have to be approved first
11:05
[Comment From DrederickTatum] 
Milton Friedman did the best job explaining the Great Depression in his seminal book "Capitalism and Freedom." Ultimately, he concluded that the most culpabale institution for the size/scope of the depression was the Fed.
11:05
[Comment From Guest] 
unfortunately it's not a chat, it's liveblogging. coveritlive.com pretty clearly states that
11:06
Henry Blodget:  Yes...we're moderating.   We usually don't add comments that are either duplicative or off-topic.   Please keep them coming...
11:06
[Comment From Garcon] 
depends on the likely hood of on interest rate decrease
11:06
Stuart Davidson:  surprising amount of green in the financial sector today: http://www.smartmoney.com/map-of-the-market/
11:07
[Comment From DrederickTatum] 
Friedman was pretty much willing to throw chalk up other causes of the depression to 1) lack of transparency in markets; 2) panic. Institutionally, there's no chance the depression is as bad if the fed cut rates in 1930... It would have saved banks and prevented failures.
11:07
[Comment From DrederickTatum] 
Admission: As a Chicago alum, I'm biased in favor of Friedman
11:07
Henry Blodget:  Every day, CNBC assembles panel of folks throwing hats in on bottom.   Someday someone will be right!
11:07
[Comment From Thomas] 
Do you believe market it repricing based on fundamentals or more panic/apathy
11:07
[Comment From Dash Chang] 
Million dollar question is "when will we hit bottom?"
11:08
Joe Weisenthal:  Yes, Henry. That's the good news. Eventually someone must be right.
11:08
Henry Blodget:  On prices: We actually just hit fair value (900 on S&P 500) after being above it since early 1990s.   That is VERY good news for long term investors.   Unfortunately says nothing about near-term.
11:09
Henry Blodget:  This stuff about credit markets improving is VERY important: GE paper, etc.
11:09
[Comment From Tim A.] 
I would prefer the market NOSE dive.. this long drawn out slow crash is anoying...
11:09
[Comment From DrederickTatum] 
@ Henry - I guess you're right: Art Cashin has been calling bottom for a year... one of these days, the old man is gonna nail it.
11:09
[Comment From Tim A.] 
This is all panic baby. I wonder what the effects are of the internet, blogging, chat, ect. on the market...
11:09
[Comment From J.W.] 
so how long before things get so bad that martial law is declared?
11:10
Henry Blodget:  DOW 3000 for martial law.   (And by the way, that's where DOW would be in 2026 if we mimic Japan's performance.   Here's hoping we won't...and I don't think we will).
11:10
Henry Blodget:  Gold: No real insight, but I doubt it.   All commodities crashing because demand dropping.
11:11
[Comment From Guest] 
Do you guys think gold prices will break its record high in the coming weeks?
11:11
[Comment From Tim A.] 
Henry, how about assemble a list of things we need individually if the treasury defaults... Like a mountain bike, first aid kit... ect.
11:11
Joe Weisenthal:  Speaking of Japan. Check this out. Apparently 80 percent of companies are trading sub book value http://www.bloomberg.com/apps/news?pid=20601101&sid=aPD3m1NZ7zPU&refer=japan
11:11
Stuart Davidson:  West TX crude trading below $80 for the first time since '04. First story on local news here in ATL this morning was gas at $2.99/gal.
11:12
[Comment From J.W.] 
or even better question, how long before the root cause of this problem is actually addressed by policy makers?
11:12
[Comment From Jim] 
I've started to wonder lately whether GWB will declare a national emergency and suspend the election until things are stabilized.
11:12
[Comment From DrederickTatum] 
Henry - What's your take on the likelihood/necessity of accounting reform with respect to "Fair value" and FASB 157?
11:12
[Comment From mark s] 
Book value? Isnt "book value" half the problem?
11:12
[Comment From Tim A.] 
We have gas in Ft. Worth for 2.75/gal
11:12
Joe Weisenthal:  Well, in the financial sector, book value is rubbish. But outside of that, I think it still has some meaning.
11:13
Henry Blodget:  Drederick...Re Fair Value: I'm a strong believer in mark-to-market.   Accounting is NOT the problem here.   And denying the asset values will just prolong the recovery.   Banks made bad bets.   They need to pay price and move on (with government help).
11:13
Henry Blodget:  If they want to also argue that these are some sort of "firesale" valuations and will end up being worth a lot more, fine. But I want to know what they're really worth (which is what someone will pay for them).
11:14
[Comment From Thomas] 
based on current market information accessible on almost real time basis as opposed to the 80's have to believe current voliatility is going to be the norm...whether up or down..thouhgts?more so the information available.
11:14
[Comment From J.W.] 
ooo 2.99/gal...that's cheap...how cheap? cheap as hell
11:14
J. Tang:  MS is really getting trashed, I don't think they're going to make it past the weekend
11:14
Stuart Davidson:  @Tim A. - I believe it; Atlanta runs pricey compared to rest of US. We require a special "boutique" low-emission blend of gas.
11:15
[Comment From DrederickTatum] 
@Stuart - Not sure about that - Paid 3.83 in Chicago this week
11:16
Henry Blodget:  MS: I can't believe Mitsubishi won't walk away or demand repricing. If former, I think they're done (Treasury will take over).   Just too much loss of confidence, from clients to Moodys, to possibily Mitsubishi: http://www.clusterstock.com/2008/10/morgan-stanley-ms-fate-in-mitsubishi-hands
11:17
[Comment From mark s] 
There is a profound to suspend trading for a week on all exchanges, demand full disclosure of any toxic holdings, and work out set-offs and write-downs. There is 55 trillion (at least) in CDS out there and no one is fessing up. Now that does not even begin to describe other swaps and forwards markets.
11:17
[Comment From R.J.K.] 
We'd (US Government ie we the people) better buy all risky paper at today's face value, can all CEO's involved and get on with some check and balances-can you say "New Deal"
11:17
[Comment From Tim A.] 
If Mitsubishi does NOT back out of this deal.. that is proof of the illuminati.. or some other conspiracy...
11:17
[Comment From J.W.] 
well up here in WA, I believe we are subjected to a bunch of fuel additives, and gas taxes that make buying gas at Arco approx. 3.50/gal
11:17
Stuart Davidson:  @Dred - the $2.99 is stupidly low. places i drove by the morning were in the $3.50 range. the real story is crude oil continuing to fall.
11:17
John Carney:  I absolutely agree, Henry. How can Mitsubishi be expected to pay what the agreed to when the stock is trading down 30% sinc then. Does anyone know what kind of Material Adverse Change they have in this?
11:17
J. Tang:  @Thomas I know Mandelbrot did some work on volatility clustering, don't have the details right in front of me regarding time. (Mis)behavior of the markets is a fun read
11:18
Henry Blodget:  30%!   It's down 60%
11:18
Joe Weisenthal:  heh, it's down 31 percent just today.
11:18
John Carney:  True. I meant just today.
11:19
Henry Blodget:  Ah, sorry.   Yes.   Here's Gasparino on MS again
11:19
[Comment From DrederickTatum] 
Anyone think that MS is going to have to start planning for a Mitsubishi walk away? They'll need an immediate contingency plan or they would be crushed. HSBC has capital... but they are rumored to be interested in RBS. What's the fall back option?
11:19
[Comment From Beerio] 
If Mitsubishi don't back out or renegotiate then they're idiots. I suspect US govt will then step in and nationalise ala AIG. Then we'll be in real trouble.
11:19
[Comment From Curtis] 
Pushing off mark to market just leaves crap assets on the books, which will slow investment. I think your point is right, Henry, in that they aren't going to lend to people with these inflated values on their books. All you do is prolong the crisis, like Japan in the mid 90s.
11:20
Joe Weisenthal:  Can SEC impose a short selling ban on just MS?
11:20
Henry Blodget:  Gasparino on MS: nothing new: Same report as this morning.   Yes, I think if Mitsubishi walks away, Treasury has to step in.   Moodys sucker-punched them.   That combined with stock price and fleeing hedge funds are definitely "adverse change"
11:20
[Comment From KP] 
Hey guys are they going to blame shorts on GS, MS today?
11:20
Henry Blodget:  Natch!
11:21
John Carney:  Joe, one plan under consideration is some kind of circuit breaker that would block short sales if short interest picks up too swiftly.
11:22
J. Tang:  Probably wouldn't stop all the HF's from running away
11:22
[Comment From Beerio] 
Now that Citi are no longer buying Wachovia are they a potential saviour for MS?
11:24
[Comment From DrederickTatum] 
Carney, can citi keep up its tortious interference suit while foregoing its rights on the injunction?
11:24
[Comment From J W] 
Citi is the only one left to chip in
11:24
Stuart Davidson:  @Beerio - what does MS have for C? deposits? not really. lots of questionable assets? yes. lots of risk? yup. can't see that one happening.
11:24
John Carney:  I'm getting tired of rating agency bashing. Sure they completely missed the risk in MBS but so did everyone else.
11:24
John Carney:  Dedrick, I don't see why they couldn't.
11:24
Henry Blodget:  I don't think Citi can afford it.   Certainly not without Treasury backstop
11:24
[Comment From Thorsten Gültekin] 
I do not see how saving MS would benefit Citi right now. They probably wanted Wachovia for their normal customer segment or?
11:25
[Comment From DrederickTatum] 
@Beerio - What kind of partner can Citi be? They couldn't even come close to matching the WFC offer... Citi's balance sheet, coupled with its apparent market weakness in mergers, scares the hell out of me.
11:25
J. Tang:  Maybe reuniting the house of Morgan?
11:25
John Carney:  In fact, dropping the attempt to do the deal might make the lawsuit stronger. They can say: see, Wachovia made the deal impossible.
11:26
[Comment From John Russell] 
What value does MS add to Citi??? Their investment bank is better but not so much that it would make any sense to Citi...
11:26
[Comment From Beerio] 
@Stuart - well you could say the same about LEH not holding much value for Barclays, but there's definitely value there. Assuming you can get a sweet deal out of the Fed then I think there's definitely value. Of course this assumes that investment banking/broking survives as a business, which I'm kind of hoping is the case
11:28
J. Tang:  Carney, do you think the Fed/Treasury would put any pressure on Citi to go quietly? Or would Citi even listen? They don't sound too happy about the whole thing
11:28
Joe Weisenthal:  I don't know about y'all, but I take no comfort from talking heads continually citing the VIX as a sign of a market bottom.
11:28
[Comment From J W] 
Citi's lawsuit is like fighting for one can from a 6 pack
11:28
[Comment From R Williams] 
Why hasn't the uptick rule been reinstated? Is it just coincidence that the market drop started when this wws changed?
11:28
[Comment From J.W.] 
anyone else hear how Dick Fuld got knocked out at the gym...guessing someone was not happy about the way things turned out with LEH
11:29
[Comment From Thorsten Gültekin] 
One question: Now that the big IBs are operating under the SEC, what happens to 144 markets like GSTrUE or Opus-5. I mean, they are not really evolved right now, but might this be a direction that the banks will take to get out of SEC oversight in the long run?
11:29
Henry Blodget:  Story re Fuld furious employee slugged him: http://www.clusterstock.com/2008/10/dick-fuld-ko-d     Lehman denies
11:30
[Comment From Rav] 
is there a way to buy puts on vix?
11:30
J. Tang:  @ Thorsten SEC doesn't regulate the I-banks anymore, since there aren't any really
11:30
Stuart Davidson:  @Beerio - I hear you on acquiring some of MS' talent. If Citi can pick and choose, maybe; but taking on all of MS in order to get some human assets seems like overkill. Citi would be better served going after another regional (SunTrust, Nat City, etc.) to shore up its deposit base. MS doesn't offer that.
11:31
[Comment From Beerio] 
yes re: Vix puts. Lots of options
11:31
[Comment From John Russell] 
@Moderators. Given this disasterous effects of the Lehman failure as evidenced by the auction today...isnt it safe to say that all survivors are safe (relative term) in terms of future bailouts. Wouldnt any larger firm going under (MS, C, dare i say GS) be even MORE disasterous?
11:31
Henry Blodget:  I'd be shocked if Feds let any more big banks go bankrupt. That doesn't mean shareholders are okay, though.   They'll be nuked.
11:32
[Comment From John Russell] 
Do you think Abu Dhabi & Saudi Prince would let themselves be nuked?
11:33
Joe Weisenthal:  I'm not sure they control our financial policy, just yet.
11:33
[Comment From Thorsten Gültekin] 
Well yes they are not really in the business right now, but they will (hopefully) be back in the long-run and they will probably not want to operate under SEC regulation then. And as I understood it, now they would be SEC regulated if they were in the game right?
11:34
[Comment From Beerio] 
@Stuart - agreed on the deposit base issue, but it all depends on the backstop the Fed provides, which I'm assuming would be substantial.
11:34
J. Tang:  Also, not sure if this has been reported yet, but Iceland isn't the only country about to go under. So is Pakistan: http://www.telegraph.co.uk/news/worldnews/asia/pakistan/3166421/Pakistan-seeks-US-funding-to-avoid-bankruptcy.html
11:35
[Comment From John Russell] 
Point is certainly Citi would turn to them first if need be, and they would likely want to step in before the US government, no?
11:35
Henry Blodget:  I really don't think Citi would dare do it without government help. Especially with no time for real due diligence.
11:35
Sidney:  What are the odds China will let the RMB rapidly appreciate if the US consumer is no longer able to keep demand for chinese products going? If we buy less, they lend less, we print more money how much longer can the US dollar go up in value?
11:36
J. Tang:  I don't even know how much Citi would trust the government at this point. Seems like they're still really sore about the Wachovia deal.
11:36
Henry Blodget:  Okay, folks, I'm off until early afternoon.   Lots of folks still here, though, so we're going to keep open.   Leaving you in John Carney and Joe Weisenthal's capable hands.
11:36
Sidney:  also related how much longer can the Hong Kong authorities continue to hold its peg to the Dollar if the Chinese RMB continues to appreciate
11:36
Sidney:  Thanks Henry
11:36
Joe Weisenthal:  Later on.
11:38
J. Tang:  Sidney: Good article here: http://piaohaoreport.sampasite.com/china-financial-markets/blog/The-currency-debate-re-ignites.htm That blog is a goldmine for Chinese financial market insight
11:38
John Carney:  Yeah. The FDIC and the FED have played   very interesting roles in this. I wonder if Steel, who was a very big Treasury Dept. muckety-muck before landing the top spot at Wachovia, made some calls to his friends to get Citi to back off.

11:40
Joe Weisenthal:  Thanks for pointing to that blog. Always looking for new ones to add to the RSS reader.
11:41
[Comment From hehateme] 
when will the fed raise intrest rates
11:41
[Comment From J W] 
All my real estate properties in Hong Kong are still rising in prices
11:42
Sidney:  its interesting how far the Hk developers have fallen.. things like Great Eagle Holdings, Warf, et. All
11:43
Sidney:  Even the Champion Reit spin with Langtham Mall and the Citi building are yielding 14%
11:43
Sidney:  assuming dividends continue of course
11:44
Sidney:  J W are you in HK? or just invest there?
1:30
John Carney:  it feels very much like a holding pattern.
1:30
Henry Blodget:  Two hours away and seems I haven't missed much in market
1:31
John Carney:  Market has been moving more or less sideways since noon.
1:31
[Comment From Alex Schleber] 
Must-read (though long) over at the WSJ about a high-level Wall Streeter meeting today... not hearing much out of them to be positive about, sounds like lack of real leadership and instead blame shifting (similar to Fuld the other day) http://blogs.wsj.com/deals/2008/10/10/jamie-dimon-lloyd-blankfein-steve-schwarzman-discuss-salvation-at-the-nyse/
1:32
Henry Blodget:  End of day is going to be critical.   I found myself being optimistic, because I thought traders might assume that governments will act this weekend in major way.   But then they've been acting in major way for a month and hasn't done squat
1:32
John Carney:  Thanks Alex. We gave that meeting some historical perspective here: http://www.clusterstock.com/2008/10/what-would-jp-morgan-do
1:33
John Carney:  It's interesting that Jamie Dimon, at that meeting this morning, says "Governments will win." Against who? The market?
1:33
Henry Blodget:  I see people haven't gotten any more optimistic about Morgan Stanley.   I still think Mitsubishi will walk (or demand new price)
1:34
[Comment From Todd VanMaren] 
Market is setting up just like it has, holding midday before a closing selloff. Trend intact
1:34
[Comment From Alex Schleber] 
@John - thx, hadn't read that particular post yet...
1:34
Henry Blodget:  [Private Message to Alex Schleber] Your comments will now be published automatically.
1:34
[Comment From Matt] 
My Wife works at a Ski resort in Conference Services and Just told me that Prudedential pulled out of the conference they had planned for Monday ...a fund mangers conference
1:35
John Carney:  Absolutely right. How can Mitsubishi pay $9 billion for 20% of a company with a market cap at $8.5 billion? That's like a 500% premium.
1:35
Alex Schleber:  @Henry - I think that no one believes anything anymore until they see the actual ACTION... what's prevented Paulson from announcing a direct cap injection into e.g. Morgan Stanley TODAY, it's not really that hard is it... oh wait, but they're not Goldman...
1:36
Henry Blodget:  And Mitsubishi certainly would have an "adverse change" claim (40% of hedge funds bolted per WSJ, Moodys, stock price)
1:37
Alex Schleber:  If all you see coming out of the weekend meetings are further announcements, I could see the market continuing to tank Monday... send the money already, it IS approved, get the Mitsu deal to close any way possible. I think if it falls through, both MS AND the market/economy might be toast for good.
1:37
John Carney:  It's hard to believe they would have signed a deal that didn't have a "business prospects" MAC. I guess MS could always answer back, "This might be adverse but it's not really a change. You knew we were screwed when you got in bed with us."
1:39
[Comment From Dan] 
So when the Lehman CDS auction closes in 20 min do we fall through the floor?
1:39
[Comment From Matt] 
There will be many Weekend Crisis Meetings
1:39
Alex Schleber:  @John - the gov't needs to shore up this deal right now, by any means necessary. Else private capital will stay out of things for good.
1:39
Henry Blodget:  Do we have any more info on Lehman CDS pricing?   Last info I got was 9 cents on dollar.
1:39
[Comment From mark s.] 
omg please. no direct cash injections are meaningful while you have trillions in undisclosed liabilities hidden from view. I see one clear choice. You must close the markets and suspend trading and demand a full disclosure from every company holding CDS or related instruments. Then you can pair off and strip out those liabilities. How could so few people understand the nature of the derivatives????
1:41
[Comment From Thorsten Gültekin] 
Somehow what Mitsubishi is doing reminds me of how Japanese investors purchased way too much property in 1986. With the only difference that the crash was still to come back then.
1:41
Alex Schleber:  @Mark S. - agreed, full disclosure is essential, as Henry has been arguing as well... but capital today can buy enough time to do this (and hopefully will be tied to the capital injections: Here's your money, now open the kimono..."
1:42
[Comment From Guest] 
re mark s. how would you reliably disclose and price derivatives without a working market?
1:43
Alex Schleber:  @Mark S. - else, I agree, they probable need to take a one week trading holiday, and begin to sort things out during... but it is a huge risk, in case it doesn't get done in time... also, would you have to declare a simultaneous banking holiday as well???
1:43
Henry Blodget:  From WSJ: U.S. stock exchanges are working on a temporary circuit breaker that would stop short selling in a stock following a big drop in price, according to people briefed on the proposal.
1:43
Henry Blodget:  When will people learn that shortsellers aren't the problem here.   Let the market work
1:47
Alex Schleber:  @Henry - 100% agreed, the ban only made things worse. And if they are so darn big on banning naked shorts and getting the uptick rule back, why on earth haven't they just instituted this already... they had several weeks before the complete ban was lifted (my guess is they know that it would hardly make a difference)
1:48
[Comment From mark s.] 
Alex, we need full disclosure from EVERY company. not just ones getting cash. its like finding one cockroach at a time. as far as pricing goes, its not really a pricing issue. first you disclose. then you OFFSET. the risk of the CDS relates to the counterparties risk. if we saw ALL the cards, we could mitigate and even have governments guarantee counterparty obligations. little money would chage hands.
1:48
[Comment From mark s.] 
Henry, the market does not work!!!!!!! that has been the whole problem. the market is not a free market. free markets exist in fiction.
1:48
[Comment From Matt] 
Let the market Work and dont use taxpayers money to bailout Execs with MBAs and who got greedy
1:48
[Comment From Matt] 
DOW -526
1:48
Henry Blodget:  Wow.   I turn away for five minutes and kablooey
1:50
Alex Schleber:  My sense is that it is better for the market to take another big hit today, which hopefully will instill that last little bit of urgency for the meetings this weekend. If it's "only" 300-500 down at the end, they might see that as an excuse to dally around even longer...
1:50
[Comment From Guest] 
get ready for a weekend beyond 8000
1:50
[Comment From Todd VanMaren] 
are Lehman results official yet
1:50
Alex Schleber:  oops, there goes 8,000...
1:54
Alex Schleber:  @Henry et al. - slight change of topic: anyone have any idea of why the Euro keeps tanking? It doesn't seem to make sense, they have instituted more confidence measures faster, and their ECB rate is still at over 4%... meanwhile we know no one is buying U.S. equities or anything else... so, what gives?
1:55
[Comment From Matt] 
DOW is under 8000
1:55
[Comment From Matt] 
As long as my ISP and Electric company dont fail Ill be OK ;P
1:56
Henry Blodget:  Re euro, no real insight.   I think part of it is just making up for dollar collapsing ahead of it.   For once we're not getting worse at the fastest rate
1:56
Alex Schleber:  jumped back above 8,000, that seems to be the technical level they are fighting it out over right now... now back below, then above...
2:00
John Carney:  Wow. Erin's hair is very big today. What does that mean for markets?
2:04
[Comment From buttag] 
Henry, good call about AAPL support @ 90. seems to be the reliable floor in the market
2:04
[Comment From Matt] 
Also other World Markets have their eye on the US and selling on the US results .The Aussie market Opens almost after wall st closes .
2:04
[Comment From ben] 
8000 is the battleground. If 8000 falls then 7000 will become the bottom. 8000 better hold
2:05
Henry Blodget:  Yes, at $90, after factoring out cash, Apple trades at just under 10X trailing free cash flow, which is extraordinary.  
2:07
[Comment From Mark C.] 
Henry, what are your thoughts on what Berlusconi said earlier today about closing worldwide markets until a plan can be put into place?
2:08
Henry Blodget:  I can't imagine they would be able to close all world markets at the same time.   I also think it create absolute panic.
2:08
[Comment From SMK] 
this chat beats real work... anyway, just heard on the radio that Johnny Mac proposed suspending the mandatory sale of IRA and 401(k) investments at 70 1/2 until the market improves... what's your take on that?
2:08
Joe Weisenthal:  Yeah, I think that'd be a terrible idea.
2:09
[Comment From Matt] 
The Aussie Market lost $95 million on Friday
2:12
Joe Weisenthal:  YHOO sub-$12
2:12
Alex Schleber:  @Henry - that makes some sense, however someone must still be buying dollars for something to drive the price, and I can't for the life of me figure out what it is... other than treasuries, but even there, the German Bund treasuries are at 4.65% for the 10-year, vs. only 3.9 for the U.S. 10-year... thoughts?
2:15
Alex Schleber:  In the "Battle of DOW 8,000", the "bulls" have won out so far... you could clearly see that no one wanted to let that happen... yet... but for how long can they hold out?
2:15
Joe Weisenthal:  Closing the market, no better than smashing the thermometer http://busmovie.typepad.com/ideoblog/2008/10/smashing-the-th.html
2:16
Joe Weisenthal:  That being said, I'm kind   of glad the US market has a three day weekend. (It's closed for Columbus, right?)
2:17
[Comment From mark s.] 
what is with this blind worship of the markets. when the markets become dangerous and disfunctional, why not close it and fix it. this is a disclosure problem. 50 trillion in UNdisclosed deriatives (or more). so the market is just guessing in the dark.
2:17
[Comment From Ben Fremer] 
Does this mean extremely cost-competitive (low cost) ompanies like Wal-Mart will probably do even better, or will they even be hurt by this? I believe their stock has so far gone up with the overall downturn. (I ask b/c I run an extremely low cost & price competitive company, and business is as good or better than ever)
2:17
[Comment From RTH] 
SMK - that'd be a great idea coming into the end of the year - no forced selling
2:17
[Comment From Guest] 
Dollars to pay the CDS on Lehman? 360 billion it seems
2:17
[Comment From Brazilian dude] 
Dollar is rising to unwind positions. $360 billions for Lehman CDS is just the tip of the CDS iceberg
2:18
[Comment From Mark C.] 
Thanks for the link. It made me feel a bit better about the markets staying open.
2:20
[Comment From Brazilian dude] 
Cost competitive companies should survive the storm, but they too will be severely affected in their earnings.
2:22
Henry Blodget:  McCain odds down to 22% on Intrade. Post-Palin low
2:22
Joe Weisenthal:  I have to say, if I had money in Intrade now, I'd be buying at .22.
2:23
Henry Blodget:  I don't know. I think in reality, chances may be even lower than that.   Although polls are still much closer (5 points) so maybe not
2:24
[Comment From mark s.] 
Joe, that linked comment was utterly illogical and unfounded. there was no reasoning underlying a single statement. More importantly, closed markets are bad for traders. they are not bad for people and causes. markets only work when there is free flowing information. is there that now? if you wanted to prosecute insider trading cases, you could probably put a few million people in jail for violations in the last two weeks.
2:24
[Comment From HEY] 
Henry, any thoughts on economic crisis "heavily" unfolding 6 weeks prior to election?
2:24
Henry Blodget:  I think coincidence (timing of crash vis a vis election)
2:25
[Comment From Mark C.] 
Does anyone have confidence that McCain or Obama have any understanding of this problem? Will either of them have the right advisors to guide them appropriately?
2:25
Joe Weisenthal:  Here's how I'd look at it. Even if the election were happening today, I think he'd probably deserve a price of around .20 or so. We still have almost a month to go, during which time a jump to 30ish could easily happen on some event. That's a 50 percent gain from here.
2:26
Henry Blodget:  I think government now has right plan (recapitalize banks, guarantee deposits, guarantee bank lending).   Got there quicker than I thought they would (I thought would take until next Administration).   Now just need to add massive fiscal spending plan, and that's about all they can do
2:26
[Comment From Bjorn Tipling] 
Nytimes thinks price to earnings ratio could drop to 6, what do you guys think about that? Maybe it was covered already I just joined.
2:27
Henry Blodget:  Do you have a link Bjorn?   Would love to hear NYTimes logic
2:27
[Comment From Matt] 
If McCain and Palin stopped talking about Bill Aires and getting Republican Speakers at Rallies to use his Middle Name theyu might get somewhere ....At the monent they may as well be Like Hitler
2:27
[Comment From HEY] 
the Obama agenda is very EU. Any thoughts on alternative energy at this stage? Even if oil declines to 70, Obama will spend bilions in this sector. I'm buyin Vestas, FSLR, GEX, and LDK on these dips.
2:27
[Comment From TGoode] 
What effect will the Lehman CDS number have on the market today once they get deciphered?
2:28
[Comment From Bjorn Tipling] 
Henry here's a chart: http://nytimes.com/imagepages/2008/09/21/weekinreview/20080921_LEONHARDT_GRFK_A.html
2:29
Henry Blodget:  Yes, that's a good chart.   Each time PE has been above 20X, it has then fallen below 10X.   I believe it.
2:29
Henry Blodget:  Just hard to know when.   I thought it would happen after 2000 crash.
2:29
[Comment From Bjorn Tipling] 
Here's the discussion: http://economix.blogs.nytimes.com/2008/10/10/how-cheap-are-stocks/?hp
2:30
Henry Blodget:  Stocks just passed fair value for first time since 1992 (have been above for 15 years or so).   That is no help in figuring out what they'll do near-term, but it's comforting for long-term folks.   Finally can put money to work without feeling like you're getting rooked
2:31
[Comment From Matt] 
Alernative Energy could be a good sector if done right .Ethanol as its currently produced uses more energy Inputs than it outputs but theres subsidies that keep the industry propped up and the low price of corn.
2:32
Henry Blodget:  That NYT chart also uses cyclically adjusted earnings, which is the right way to look at it.   One-year PE misleading because doesn't account for profit margin changes
2:32
[Comment From Bjorn Tipling] 
Tech stocks have a long way down to go then, APPL is at 18, YHOO 16, MSFT 11
2:32
[Comment From simple joe] 
Henry, why don't we analyze so much when market goes up. Where was every one when housing market was booming hot and in end burnt us. May be we should look more closely anytime a market raises to see if its sound rally or not. We should let free markets play, IMHO we should have let bear sterns fail , we just delayed the crash by not doing it
2:33
Henry Blodget:  The negative analysts were there (Jeremy Grantham, Jim Grant, Warren Buffett, John Hussman, etc.).   But they seemed wrong, so no one paid any attention.   Grantham has been calling for this since 2000
2:33
Alex Schleber:  @Matt - ethanol is DOA, other true biofuels are much more promising: Oil-producing algae, and the Yathropa (sp?) oil-pod trees that can be grown in otherwise unusable land, 40-year tree life and extremely drought resistant...
2:36
Alex Schleber:  @Henry - Buffett has warned of housing and derivatives since 2003, more prominently since 2006... but people are guided by denial more than logic UNTIL the pain is staring them straight in the face... people have a natural block against revisiting prior decisions, it's called "consistency/commitment" in Psychology of Persuasion terms
2:36
[Comment From Bjorn Tipling] 
I feel like dumping more money into my 401k right now, seems like it would be a good time to do that
2:36
[Comment From Rav] 
I think 7K is really critical for DOW. If it breaks that, then next support is at 4K. Check out Dow chart from 1990. So I can believe the PE theory in NYT.
2:36
[Comment From Guest] 
i would rather put my eggs into the solar/thermal basket than ethanol.
2:36
[Comment From HEY] 
it would be great if we could get more clarity on rumors floating that world gov'ts may temporary close financial markets.
2:36
[Comment From SMK] 
This article caused a brief stir earlier this year predicting alternative energy as the next bubble. Besides that, it also has a good overview of the previous tech and finance/real estate bubbles.
2:36
[Comment From SMK] 
http://www.harpers.org/archive/2008/02/0081908 for the link, sorry hit return too early
2:36
[Comment From Matt] 
They need make value added markets around the waste from Ethanol plants at the moment the waste is sent as free feed to cow farms
2:36
[Comment From HEY] 
@ Bjorn , Good news for Google, I believe they sold out on Android shipments
2:36
[Comment From Zoli] 
Soros calls for imitating the Danish model for mortgages.
2:37
Henry Blodget:  Zoli, thanks--do you have link?   Don't know what the Danish model is
2:37
[Comment From Matt] 
@Ethanol if done right with a whole value added chain and done with cellouse/waste products isnt DOA but at the moment its the wrong model and just used to deal with the Overflowing Corn Silos .
2:37
[Comment From Ed] 
Can we expect some sort of inflection point where we go from a deflationary spiral back to inflation?
2:37
Alex Schleber:  check out my recent blog post on the psych issues inherent in this: http://businessmindhacks.com/post/psychological-aspects-of-the-financial-crisis-in-warren-buffett-we-trust
2:40
Alex Schleber:  @Matt - when I said "Ethanol", I really meant "ETOH from corn"... you are right, IF they can figure out ETOH from waste, etc. it could work... or even just taking away the punitive tariffs on Brazilian sugar cane based ETOH for starters (sugar cane is much more efficient than Corn)
2:45
Alex Schleber:  Looks like they are gearing up to test 8,000 again... 8095 now...
2:45
John Carney:  anyone got a guess about why they are cheering on the floor?

2:45
Alex Schleber:  there was just some applause on the NYSE floor, not clear why...
2:46
John Carney:  Is "survived until the final hour" now cause for cheering?
2:46
[Comment From Ed] 
16 more points and the S&P 500 will be off 50% from last year's high (!!)
2:46
Alex Schleber:  @John - hehe, apparently...
2:47
Alex Schleber:  @Ed - that would mean only about 10-15% away from Great Depression style drops...
2:47
[Comment From Bjorn Tipling] 
what's going on with IACI? It's up when everything else is down
2:47
[Comment From Zoli] 
Soros also says in this article that Danish model can easily be implemented in the US. Source, in Hungarian is http://gazdasagiradio.hu/cikk/6250/
2:47
Henry Blodget:  In Hungarian! Zoli, we need your help.
2:48
Henry Blodget:  No...Great Depression drop much worse.   S&P 500 down 86% from 1929 - 1932
2:48
Joe Weisenthal:  Cramer is on CNBC now. Why?
2:48
Alex Schleber:  @Zoli - wish that Paulson would pull the trigger already, but I guess any "brain massaging" by Soros, Buffett, and co. to cure his gag reflex can help
2:49
Alex Schleber:  @Henry - I was thinking of 1-year declines, worst was ~ 65%, no?
2:52
Henry Blodget:  Ah, sorry.   Yes, I think that's right (64% or something)
2:52
Joe Weisenthal:  Erin Burnett says there's a wire story titled "Fear Castrates Soft Commodity Markets" must find that.
2:52
[Comment From Mark C.] 
Larry Ellison just said that Oracle may take advantage of the slump by buying up other relevant software companies at a buyer's price.
2:52
[Comment From Guest] 
does cnbc add floor noise intentionally, or are they actually there?
2:52
[Comment From Dylan Salisbury] 
Is there a good public source for daily market moves or closing values, going back through the great depression, for us armchair analysts to use?
2:52
Henry Blodget:  Yahoo Finance has S&P data back through 1926 I think
2:52
Alex Schleber:  Did they ever say what the applause on the floor was about?
2:53
[Comment From Guest] 
re alex: free bagels :P
2:54
Stuart Davidson:  may have already been posted, but Ritholz posted a slew of bullish indicators: http://bigpicture.typepad.com/comments/2008/10/10-bullish-sign.html
2:54
[Comment From Ed] 
Are they still have trouble finding semi-celebrities for the opening bell?
2:55
Joe Weisenthal:  Yeah, we reposted some of his bullish indicators earlier this week. That was about 12 percent ago.
2:55
Stuart Davidson:  @Joe - (cringing) good point
2:57
[Comment From Rav] 
Seems like we are setting up for a 7.5K close
2:57
Henry Blodget:  Ford $2 share.   My goodness
2:58
Alex Schleber:  @Stuart - it's not so much that Ritholtz' stuff is wrong, it's just that this is a situation that has never before occurred in this global environment plus 100's of trillions worth of derivatives
2:59
Stuart Davidson:  @Alex - you're right. his stuff is all based on historical indicators, but our current situation is unique in history. we, and his charts, have never seen a deleveraging like this.
3:00
Alex Schleber:  @Henry, re:ford - yeah, same for GM. Note that Volkswagen was UP today in the DAX, they now have #1 world market cap... will the wonders ever cease
3:00
Joe Weisenthal:  As far as I can tell, every post on Gawker today is somehow related to the crisis. Barry should probably add that one to his list.
3:01
[Comment From Steve Garrison] 
Shouldnt the USA apologize to the rest of the world for starting this global meltdown by being irresponsible with her own market regulation and supervision?
3:02
[Comment From Mark C.] 
This may sound like a silly question, but I'm a novice and would love to get some insight. What indicators are you looking for (and should I be looking for) before you start buying again? How will we know when we're at the bottom?
3:03
John Carney:  good point Joe

3:03
[Comment From Chris Bowman] 
@Mark C. - they used to use the VIX but that indicator has been blown out the window this past month.
3:03
[Comment From RTH] 
Here's the Soros article on the Danish way - http://online.wsj.com/article/SB122360660328622015.html
3:03
[Comment From Geoff] 
Best quote from British TV news - opening line; "First, the good news - tomorrow is Saturday!"
3:04
[Comment From Brazilian dude] 
Any news on margin calls after Lehman auction ended at 8.625%?
3:04
[Comment From Alex] 
Not sure how car mfg's will survive. They are in worse shape than the banks.
3:04
[Comment From Rav] 
People are still not bearish enough. They are buying SPY on weakness. No signs of a bottom.http://online.wsj.com/mdc/public/page/2_3022-mfgppl-moneyflow.html?mod=topnav_2_3002
3:05
Alex Schleber:  @Stuart - look up Ignatius WaPo op-ed from this week, quoted Smick as saying (my **** highlight): "What's happening is the ****reappraisal of the value of every asset in the world****. The solution has got to be global."
3:06
[Comment From Alex] 
Question: with unemployment only heading higher in the coming future why doesn't the Fed guarantee home loans based on 50 to 60 years at a fixed rate of 5% (i.e.). After all this is a hard asset that "should" appreciate over that time span.
3:07
Alex Schleber:  @Geoff - priceless, typical British stiff upper lip... hey, at least their gov't got something done for them this week...
3:07
[Comment From David R.] 
Unfortunately global solutions are not something governments with domestic interests are typically in the business of. I don't think a lot of economic powers are going to be willing to keep playing ball forever.
3:09
Alex Schleber:  @Henry re:Ford - btw, I assume you saw that Ford CFO retired today, what a sign of confidence... one must wonder how much of a dent the retirement portfolio has taken over the course of this year...
3:12
Joe Weisenthal:  Looks like market's coming back a bit. If we finish down somewhere between 200-300 on the Dow, the guys on CNBC are going to act drunk happy.
3:12
Stuart Davidson:  @Alex - saw that one. Good observation.
3:16
Henry Blodget:  MISINFORMATION ALERT: Daily Kos is reporting that Hank Paulson said he will nationalize Morgan and Goldman this weekend. He didn't say that. Some other dude did: http://www.clusterstock.com/2008/10/misinformation-alert-paulson-did-not-say-he-will-take-over-morgan-goldman-this-weekend
3:17
Stuart Davidson:  lovely. stuff like that gives Kos a bad name.
3:17
[Comment From David R.] 
@Alex Do you think the Gov't is going to be forced in the next year or so to start bailing out these automakers (Particularly GM)? It seems to me that if they let them get broken up, people would think the world was burning?
3:17
[Comment From Alex2] 
oops, should have added that if there was such a mortgage program introduced this could probably keep millions of homeowners in their homes. Of course such a special mortgage program should also include restrictions such as No equity lines of credit available on the home. If the homeowner decides to sell the home and apply for another mortgage then they would need to qualify under regular market conditions...... pooling such loans with federal guarantee of 5% looks attractive in todays market. Of course this could also be an attractive asset class for individual retirement accounts (looks like a insured 50 year CD @ 5%).
3:18
Alex Schleber:  Crazy - market bounced up to near +-0 in about 5 minutes, major buying programs must have kicked in...
3:18
[Comment From Matt] 
The US Government already gave the Car Manufactures a Bailout earlier this year
3:18
[Comment From Alex2] 
@Henry -- it was a guy on CNBC Europe last night that said that during an interview. After hearing that I took a shot of tequila, okay, two shots.
3:20
Alex Schleber:  not sure on what sentiment... are there government backed/directed buyers that have been activated?
3:20
[Comment From Ed] 
Any entity that is "too big to fail" should be nationalized.
3:21
[Comment From mark s.] 
any entity that is to big to fail should be broken up
3:21
[Comment From mark s.] 
its called monopoly
3:22
[Comment From Ed] 
yes, or broken up. Agreed.
3:23
Alex Schleber:  @David R - looks like they have already started, and they'll likely have to do more. In truth, the U.S. cannot afford to not have any domestic auto-makers, so quasi-nationalization is very likely: Renegotiate all contracts, build energy-savings policies right into the resulting company/ies, etc. etc. ... Detroit has already proven that they can't hack it...
3:24
Alex Schleber:  they had 6 relatively fat years in which they could have prepared for future possible scenarios...
3:24
Henry Blodget:  This rally could be critical.   If DOW closes up, lots of small investors will think we've bounced off bottom and won't sell.   If DOW crashes last half hour, will be panic over weekend
3:25
[Comment From Alex2] 
RIMM down another $6 (11%). WOW!
3:25
[Comment From Rav] 
fasten your seatbelts for the final dump after the pump
3:26
[Comment From RTH] 
30 minutes left, here we go....
3:26
[Comment From David R.] 
@Alex true, they really are already quasi-nationalized with the Buy American Act, which guarantees them the business of all federal, state, and local agencies, but it seems like taking them any further under the government's wing would cause all of their investors to bail, and the government would be stuck with these massive money-suckers generating what is essentially unusable surplus.
3:28
Alex Schleber:  @David - their freakin' stocks are at $2 and $5 respectively, and Chrysler isn't even really in the game anymore... what do you mean their investors would bail? They're already mostly wiped out. The gov't may be their last hope IMO... buy them time to completely restructure everything...
3:28
Henry Blodget:  I think people worried about getting caught by huge government announcement over weekend.
3:29
Alex Schleber:  You mean missing the upside?
3:29
Henry Blodget:  Yes.   (And caught short)
3:29
[Comment From Alex2] 
Why is Morgan Stanley down 35% today and Goldman "only" down 17%?
3:30
Henry Blodget:  Because Goldman doesn't have entire fate in whether Mitsubishi deal goes through
3:30
Alex Schleber:  B/c Goldman has Paulson in their corner
3:30
Joe Weisenthal:  I just want to say, that on our poll here, I'm one of the brave soles who voted +200. I may be right yet.
3:30
Alex Schleber:  He obviously can't really be bothered to assist MS
3:30
Joe Weisenthal:  Souls, that is
3:31
[Comment From McRib@$.99] 
& Goldman & Paulson are sleeping together
3:33
[Comment From Alex2] 
Dow up 26. Trading should be halted NOW. "calling it technical difficulties"..
3:33
[Comment From McRib@$.99] 
When you have Paulson, Blackfein, & Buffet in the same bed thats one crazy menage trio. nobody gets off w/o the other one!
3:34
Alex Schleber:  can the volatility for today even be expressed on a chart anymore?
3:34
Henry Blodget:  Maria: Market was "a bit oversold." Love that.
3:35
[Comment From SMK] 
the government doesn't have to nationalize the automakers, just their hideous pension and health care obligations - is the PBGC fully funded?
3:35
Stuart Davidson:  I'm guessing the cheap drink specials are being called off in the NYC bars...
3:35
Alex Schleber:  when the line is simply a straight vertical line, it kind of loses all meaning, no?
3:36
[Comment From McRib@$.99] 
That is indeed one crazy slope. What's the opposite of a "V" bottom?
3:36
Alex Schleber:  @Stuart - yah, the markets were trying to save those poor bars some coin and decided to rally just for giggles...
3:37
Stuart Davidson:  @Alex - yup, the bartenders called in a favor.
3:38
Alex Schleber:  I pray that this doesn't result in the weekend negotiations ending in inaction/weak action, because the carnage on Monday would likely be incredible...
3:38
[Comment From SMK] 
@McRib - apple bottom? Much nicer to look at anyway...
3:38
[Comment From McRib@$.99] 
Eh, im not calling it a green close yet. 20mins still.
3:38
Joe Weisenthal:  +184, I wish I could prove that I voted 200+ in our poll.
3:39
Alex Schleber:  @Joe - we believe you, so what prompted your optimism? Is Goldman finally in enough trouble for Paulson to get serious....
3:39
Joe Weisenthal:  Not optimism. Pure contrarianism.
3:39
Joe Weisenthal:  Of course, we just lost another 100, so I'll probably still be wrong.
3:40
[Comment From McRib@$.99] 
LOL SMK
3:40
Henry Blodget:  MS now down only 20%
3:41
Joe Weisenthal:  Pop the champagne.
3:42
Henry Blodget:  Apple up 11%
3:42
Henry Blodget:  Huge demand around $90
3:42
[Comment From Guest] 
Day's Range: 7882.51 - 8897.62, this is just crazy
3:42
[Comment From McRib@$.99] 
(internal monologue: I really should be doing some work…eh, only another 19minutes until close)
3:42
Stuart Davidson:  Henry - think any of the AAPL action is based on the rumored new notebooks?
3:43
Henry Blodget:  Possibly.   I think there's real valuation support around $90.   Ex cash, trades at just under 10X trailing free cash flow (which is extraordinary for a company like this)
3:43
[Comment From Thorsten Gültekin] 
-,77 again
3:43
[Comment From Alex2] 
btw - this Cover It Live application is very cool
3:44
Henry Blodget:  Agreed, Alex.   Will be great for conf calls, etc.
3:44
[Comment From McRib@$.99] 
...and we're red again! woo-hoo. Anyone else seeing what's to come on some of the big techs on level2?
3:44
[Comment From McRib@$.99] 
ditto Alex2
3:44
[Comment From Guest] 
yeah, this chat thing rocks.
3:45
Henry Blodget:  Glad to hear.   We've been looking for something like it.
3:46
[Comment From Joe Garland] 
It reminds me of an old New Yorker cartoon: TV Screen with newscaster: "The Dow dropped 500 at the opening before gaining 1000 but then it dropped 500 before the close to end the day unchanged."
3:46
[Comment From mark s.] 
who is the software provider for the chat?
3:46
Henry Blodget:  Coveritlive.com

3:46
[Comment From McRib@$.99] 
Henry, you should consider leveraging Justin.TV, Yahoo Live or something& host your own show. compete with the "money honeys" ;) Use them to enter the market low cost & when it shows promise make the investment
3:47
Henry Blodget:  Yes, we're going to do video pretty soon.   Think there's lots of good opportunity there.
3:47
Henry Blodget:  Fun things that you can't do on TV or in print
3:47
[Comment From McRib@$.99] 
(obviously comment was directed to the whole SAI gang)
3:49
Henry Blodget:  MS breaking down again.   Don't mean to be dour, but just don't see how this Mitsubishi deal goes through
3:49
[Comment From Alex2] 
I'm sure these guys(CoverItLive) are on Cisco's screen.
3:50
Joe Weisenthal:  Oil down 17 percent this week. Aren't we supposed to be approaching peak oil or something, rendering supply/demand irrelevant. Or have we pushed that out a few years?
3:50
[Comment From McRib@$.99] 
Carney's post on "When MS Met Mack..." cracked me up. Kudos!
3:52
Alex Schleber:  Jeff (bald guy on Fast Money) on CNBC just ripped the ratings agencies such as Moody's... says they're toast when this gets cleaned up from a regulatory standpoint
3:52
[Comment From Foster] 
I don't think the dip in oil, now around 79.50 is going to render Chris Martensons theory invalid.
3:53
Alex Schleber:  Says they need to stop the silly/worthless/and now dangerous ratings, and the market needs to start from scratch on a new system
3:54
Henry Blodget:  Agree re ratings agencies.   Way too much power in the hands of people under extraordinary business pressure (rating customers' debt).   Thus the absurd gradations of ratings: XX PLACED ON "CREDIT WATCH"   (Translation: Sell Immediately)
3:54
Joe Weisenthal:  Apropos of absolutely nothing, a new poll has McCain up just 3% IN GEORGIA http://www.realclearpolitics.com/articles/docs/IA_Georgia_101008.htm Perhaps .22 is too high for him on Intrade.
3:55
[Comment From Alex2] 
will be interesting to see the "new" investment banks structures that crop up after the dust settles.
3:56
Henry Blodget:  I'll say again: This end of day rally critical, I think. If we had closed down 500, small investors would have gotten more and more panicked over weekend and Tuesday would have been hideous.   Now a chance they'll think "well maybe that was the bottom"
3:56
[Comment From McRib@$.99] 
I think somewhere that the fed may be prohibited in taking an equity stake of "bank holding companies"...the new structure of GS, but may still provide capital. Er...gotta find the story now....
3:57
Alex Schleber:  rightly pointed out that Andersen was punished for much lesser conflict of interest issues...
3:58
[Comment From McRib@$.99] 
er, tresury not fed...ugh
4:00
Henry Blodget:  Flat.   How about that
4:01
[Comment From Guest] 
over. quite a ride this was...
4:01
[Comment From Alex2] 
I'll take that
4:01
[Comment From McRib@$.99] 
Brvo to the flat votes!
4:01
[Comment From McRib@$.99] 
a bit anticlimactic IMO
4:01
[Comment From RTH] 
Henry - right on about investor confidence in late day rally
4:02
Alex Schleber:  so is Monday indeed a non-trading day? do the G7 guys have 3 days to figure things out?
4:02
Henry Blodget:  Monday market closed, correct?
4:02
Henry Blodget:  Didn't used to be, but I think they changed that a couple of years ago, right?
4:03
Henry Blodget:  Well then, Monday it is.
4:03
[Comment From RTH] 
fixed income short day monday, full day for equites, i believe
4:03
Henry Blodget:  Yes, that's correct
4:03
Joe Weisenthal:  Yeah, it looks like it is but seeing on 247wallstreet that the bond market is closed
4:04
Henry Blodget:  All right, folks.   Great spending the day with you.   Best for weekend.
4:04
[Comment From Todd VanMaren] 
nasdaqtrader.com says no holiday monday
4:05
Joe Weisenthal:  Yep, catch you all monday.
4:05
[Comment From Alex2] 
cheers
4:05
Alex Schleber:  so is Goldman with minus 10% still down far enough for Paulson to finally ACT?!? Will they pull MS out of the fire?
4:06
Alex Schleber:  Thanks Joe and Henry... great job... I guess live-microblogging is where it's at... ;)
4:06
Henry Blodget:  Very fun. You, too. Have good weekend.

 

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