Dinner Conversation

Stocks moved up again with expectant anticipation of a 0.50% cut in interest rates tomorrow from the Fed. However, the bond market interest rate went up today, and lost of its bias that the Fed would be cutting the full 0.50%. If the Fed cuts anything less than 0.50%, then watch out as stocks get hit hard – and decline all day.

All other markets marched sideways – awaiting the big news tomorrow.

In the news today….

Countrywide reported a $422M loss for their 4th Quarter. Countrywide share prices have continued to decline since the announcement of the Bank of America purchase of Countrywide. What will Bank of America do? Will they adjust their offer? I would bet they do.

Durable Goods orders for December increased 51.2%. The increase was probably from international orders of US goods. It is speculated that Durable Goods orders within the US was flat.

Consumer Confidence was 87.9 in January compared to 90.6 in December. Anything less than 100 is a bad sign for the economy.

Home Foreclosures was 79% higher in 2007 than 2006. There were 1.3M foreclosure warnings sent out in 2007.

Dinner Conversations

The French rogue trader who lost $7.2B for the French bank, Societe Generale, has come out and stated that his bosses knew what he was doing. Naturally, the bank denies that anyone else knew what he was doing. He stated he started trading for the bank in 2005, and made a large profit for the bank when a terrorist attack occurred in London. He stated that he only wanted to make money for the bank, and didn’t want or get anything for himself.

Those are the facts. What do you think? Did he act alone? Did the bank collude with his actions – even using a wink and a nod? Who’s liable in either case? I bet you can have a great conversation around this case. Does the fact that this happened in France skew your attitude?

Here are today’s Numbers:
Dow Jones 30 Industrial - 12,480 (Up 96 points)
10 Year Treasury Bond - 3.66% (up $.07)
Euro - $1.4773
Gold - $931 (down $2) - and hit $933 during the day.
Oil - $91.64 (up $0.65)
Gasoline - $2.33 (no change)

Spread The Word: These icons link to social bookmarking sites where readers can share and discover new web pages.

This entry was posted on Tuesday, January 29th, 2008 at 6:00 pm and is filed under Dinner Conversation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “Dinner Conversation”

dean baker on January 29th, 2008 at 7:32 pm

tom,

any good books you can recommend on the market right now that talk about the state of the ecoomy and steps to take to take advantage of the coming generational storm?

thanks,
Dean
Skip on January 30th, 2008 at 8:10 am

Regarding the French “rogue” trader: has anyone ever been accused of being a “rogue” trader after they’ve traded for large gains rather than losses?
Tom on January 30th, 2008 at 10:37 am

Dean - I will look into the books that are around. The ones i read are very dry, and loaded with statistics - i like facts and not speculation. One issue with some of the books out there is that they have a focused opinion - like gold is the only way to save yourself. There is a lot of ways to make money is a dynamic market like the one we have today, and there are a lot of ways to lose money too.

When a rogue trader makes money for his business, he is never called a rogue trader. He is called a Vice President.