Here’s a good article that summarizes the immoral choice of bailouts to avoid bankruptcies. If you haven’t noticed, oil producers, processors, and distributors are taking a beating. That’s the point where contrarians look to see if these stocks are sufficiently out of favor to make their prices attractive for investment. My guess is this bear market is far from its bottom. We do not want to jump in too early. Unfortunately, we do not know where the bottom will be — especially with so much meddling in the markets by the government and the banks. Still, it might be worth considering nibbling on out-of-favor stocks while reserving most investment cash for when the revulsion phase finally takes hold in perhaps as much as a year from from now if not longer.
Monday, stocks in Asia fell 0.7%, gained 1.4% in Europe, and rose 2.4% in the U.S. on massive volume. The VXO dropped 16% to close at 59.21. The 10-Year U.S. Treasury bond yield plummeted 11% to close at 0.67. Dow, S&P 500, NYSE closed above 22,000, 2,600, 10,000 respectively. Apple rose above 250 and IBM ended above 110.
Tuesday, stocks closed unchanged in Asia, rose 1.6% in Europe but fell 1.3% in the U.S. on massive volume. The VXO fell 8% to close at 54.57. The 10-Year U.S. Treasury bond yield rose 4% to close at 0.70. Precious metals fell 2% and their miners gave up twice that amount. The Dow closed below 22,000 while the S&P 500 ended beneath the 2,600 benchmark. Here’s another article on how the magic of fractional reserve banking rules multiply the moral hazard of this reckless bailout.
Wednesday, stocks fell 2.2% in Asia, gained 2.9% in Europe, and fell 4.4% in the U.S. on massive volume. The VXO rose 16% to close at 63.57. The 10-Year U.S. Treasury bond yield slid 9% to close at 0.64. Precious metals miners gained about 4%. The Dow closed below 21,000 while the S&P 500 ended beneath the 2,500 benchmark. Apple and IBM closed below their 250 and 110 benchmarks respectively.
Thursday, stocks closed unchanged in Asia, gained 0.6% in Europe, and rose 2.2% in the U.S. on massive volume The VXO fell 14% to close at 54.81. Precious metals rose 2% while their miners gained twice that amount. The Dow closed back above 21,000 while the S&P 500 recaptured the 2,500 benchmark. IBM closed at 110.
Friday, stocks fell 1.1% in Asia, 1.0% in Europe, and 1.8% in the U.S. on extremely high volume. The 10-Year U.S. Treasury bond yield dropped 6% to close at 0.59. IBM closed below the 110 benchmark again.