The Squawk box, here are the videos.
Part 1:
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Buffett on CNBC
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Author: stlplace
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This is the T. Rowe Price TV commercial I saw today.
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Don’t tick off Jon Stewart
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(Update 2: March 11) Cramer shot back, Stewart responds.
(Update) Correct the name (from Steward to Stewart).
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Recent Bank Ads on WSJ
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We know CEOs of some of the nation’s largest banks are buying their companies’ stocks, to show their confidence on their respective company.
It’s also interesting to see some of the leading banks are putting up a lot Ads on Wall Street Journal. I took some pictures here from WSJ in these days and share them here.
(Citi bank shows a happy couple/home owners who got mortgage from Citi)
(This JetBlue ads encourage CEOs to ditch their business jet and use the discount carrier)
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Glass half full? Glass half empty?
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Week in review 030109 to 030709
We are officially in Obama bear market (source: Bloomberg), in other words, the stock market (i.e., Dow industrial for most people) dropped 20% since President Obama took office in Jan 20. Yesterday S&P 500 briefly touched 666 (the number of devil), pretty scary, huh? I am sure this economy/financial crisis has been the hot topic in many kitchen table, or office cafeteria. The financial media is also taking the crisis as oppertunity — we have seen numerous experts, panel discussions, such as the “Help Wanted” talk last night on CNN money, which is mainly talking about the Feb. job (loss) number: 650,000. This number is actually small, if we put it into perspective that 20 million Chinese migrant workers already lost job since the end of last year (read my friend Bo Peng’s article if you are interested).
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This is the second part of my thoughts on bank nationalization, I hope President Obama and his finance team can read my blog, as they are thinking through the “bank rescue”, the No. 1 issue facing this country, and the world economy for that matter.
As I said in my previous post, bank nationalization appears bad for the existing shareholders of bank common stocks, in the sense they will get wiped out or diluted. But I also said this is merely “mark to market” for them, whether they want to face it or not, the day of reckoning will come soon or later. In the mean time, when we are waiting for the eventual take over of some of the nation’s largest banks, consumers and business get scared, they either withdraw money and put under their mattress (consumers), or stopped investing and started hiring freeze/travel freeze/lay off (business). This will have spill over effect on the world, as we are living in a increasingly globalized economy. When the rumor of China new stimulus started, the US stock market started to rally. You got the idea.
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S&P 500 10 years chart
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March 04 1999 to Mar 02 2009, courtesy of Google Finance.
Two thoughts pop up by looking at the charts:
1) We probably have not hit bottom yet;
2) The drop in mid 2008 till now is so sharp, 50% in one year 🙁
BTW, I think it’s a good idea to stay away from the market these days. Learn from the Oracle of Omaha.
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(Update Mar07, 2009) I found a good example on performance comparison of regular ETF vs. leveraged ETF. In the past year, the finanicals ETF XLF lost about 75%, while the ultra financial proshares UYG (2 times bull) lost 95%. You can use google finance to draw the comparison.
MorningStar link here.
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Dow 5,000?
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I remember years ago (in dot com era) there is a book named Dow 36,000. Obviously that predication was a laughing stock becaue Dow crashed in year 2000. No I am not trying to make a fool of myself, my title Dow 5,000 is merely to reflect today the Dow and S&P dropped to 12 year low again (source: bloomberg).
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What is nationalization
This is my understanding. Usually a company has 3 types of capital: debt, preferred stock, common stock. In terms of ownership the equity holders (common stock holders) own the company. We say they borrow from the debt holders: in return they pay interest and principle to the debt holders down the road.
In the case of bankrupcy, debt holders have priority over preferred holders, preferred have priority over common, etc. (note all debt are not euqal too, some are senior than others, some are secured, some are not).