Posted on 10/09/2002 5:25:50 PM PDT by rohry
So what this guy is saying basically is that we're cooked! Stick a knife in us cause we're done. Nothing can save us so the last one out turn off the lights. We can't recover--- EVER?!! Everyone will lose EVERYTHING! Does that about cover it?
The Boston Celtics (BOS) were hot and the National Basketball Association season hasn't even started. Shares of the storied basketball franchise shot up 147 percent, closing up $16.65 at $28. Details of a buyout offer for the team were unveiled last week.
US CREDIT OUTLOOK - Almost no place to hide
Wednesday October 9, 4:58 pm ET
By Eric Burroughs
NEW YORK, Oct 9 (Reuters) - Each day seems to bear more grim news for high-strung U.S. capital markets and provide U.S. Treasuries yet more reason to hit new historic low yields.
As stocks keep hitting five-year lows and mounting worries about credit quality have pummeled widely held names like Ford Motor Co. (NYSE:F - News) and J.P. Morgan Chase (NYSE:JPM - News), investors are seeking shelter in only the safest of capital hide-outs.
Thus benchmark Treasury yields keep plunging to levels not seen since the 1950s and two-year note yields hit record lows, and analysts see nothing to stop the trend on the horizon.
Spreads on corporate bonds, agency debt, mortgage-backed securities and emerging market debt all widened against Treasuries on Wednesday -- and with good reason.
The Dow fell 215 points on an analyst warning about General Electric's (NYSE:GE - News) future performance. Ford's bonds were hit hard. Moody's downgraded J.P. Morgan Chase's credit rating, while the rating of Germany's Allianz Group was also knocked down by both Moody's and Standard & Poor's. Junk bond yields soared to record highs near 11 percentage points over Treasuries.
more: http://biz.yahoo.com/rf/021009/markets_bonds_outlook_1.html
J.P. Morgan Cut by Moody's, Affects Debt
Wednesday October 9, 4:56 pm ET
By Jonathan Stempel
NEW YORK (Reuters) - Moody's Investors Service on Wednesday cut J.P. Morgan Chase & Co.'s (NYSE:JPM - News) long-term debt ratings, reflecting concern about the No. 2 U.S. bank's near-term ability to maintain "acceptable profitability" as investment banking revenue falls and loan losses mount.
The downgrade, affecting about $42 billion of debt, follows a similar downgrade on Sept. 17 by Standard & Poor's Ratings Services. J.P. Morgan shares fell nearly 7 percent on Wednesday, suffering most of that decline after Moody's early afternoon downgrade.
Moody's cut J.P. Morgan's senior unsecured debt one notch to "A1," its fifth highest grade, from "Aa3," and also cut several other ratings. Its rating outlook is now stable.
MORE: http://biz.yahoo.com/rb/021009/financial_jpmorgan_moodys_7.html ==============================================================
Ferguson: Fed Can't Fix Stocks Swings
Wednesday October 9, 8:49 pm ET
NEW YORK (Reuters) - The Federal Reserve is limited in what it can do to help smooth economic ups and downs, the U.S. central bank's vice chairman said on Wednesday as analysts fretted about the strength of the recovery and stocks tumbled to fresh multiyear lows.
In remarks prepared for delivery to the Bond Market Association, Fed Vice Chairman Roger Ferguson also stressed that the central bank cannot target stock prices, even though some analysts have suggested it should take on more of a role in managing swings in the markets.
"Nobody would deny that central banks can be quite powerful and that monetary policy works, over time," Ferguson said. "But in the scheme of things, a central bank's ability to smooth asset prices (if it wanted to) or to buffer shocks to spending or production is somewhat limited."
He added that "monetary policy action cannot appropriately be targeted to benefit one industry, region or economic group."
Ferguson's discussion of "Central Banks and Markets" came as major U.S. stock indexes tumbled to new multi-year lows in the aftermath of a huge run-up during the late 1990s.
The blue-chip Dow Jones industrial average sank 2.87 percent to 7,286.27 on Wednesday, a low not seen since October 1997. The index is down more than 37 percent from its January 2000 high. The broad Standard & Poor's 500 Index fell 2.73 percent while the Nasdaq Composite slipped or 1.34 percent to hit a new six-year closing low.
Some economists have criticized the Fed for not doing more to try to burst the late 1990s stock market bubble before it got out of hand. Such critics have said higher interest rates might have helped to contain what Greenspan once referred to as "irrational exuberance" in the markets and, thus, possibly have prevented the ensuing hangover.
But Ferguson said the Fed focuses squarely on the macroeconomy and the broad level of prices of goods and services, aiming to avoid either excessive rises or broad declines in prices.
"Some have suggested that under some circumstances central banks should adjust the overnight funds rate to affect intentionally the relative price of another asset class, namely equities," he said, acknowledging the criticism.
"UNINTENDED CONSEQUENCES"
But he cited two drawbacks to trying to make stock prices the focus of interest-rate actions: the fact that there is no clear link between rate changes and stock movements and also that there could be "unintended consequences" for the economy from efforts to influence equity markets.
Ferguson did stress that stock market movements factor into Fed decisions, even if they are not the target of policy.
"To be clear, this is not an argument for never considering prices in asset markets when determining how well we are likely to do in achieving our goals," he said.
Just as the Fed's powers are limited concerning stock movements, it cannot always fully counter surprise events or "shocks" that might hit the economy. Ferguson cited the recent sharp pullback in business investment spending as an example.
"The reality is that when the shortfall in desired spending is large or arises quite quickly, as was the case last year when businesses slashed their investment plans in light of a perceived overhang of capital, the initial monetary policy offset can be only partial and not necessarily synchronous," the Fed vice chairman said.
The U.S. central bank last year slashed interest rates 11 times to a 40-year low of 1.75 percent as it sought to fight a recession triggered largely by the business spending pullback.
Although a recovery appears to be under way, it has been choppy and slow to hit its stride.
Ferguson did not discuss the current economic outlook, nor did he delve into the issues of recent Fed policy discussions. At the central bank's last meeting on Sept. 24, the majority of Fed policymakers decided to leave interest rates steady.
But two officials dissented, arguing for cuts in rates.
Without specifically mentioning the two recent dissents, Ferguson said he has been "pleased" with the Fed's decision, announced in March, to disclose to the public any dissents at monetary policy meetings at the time that they occur.
Previously, such dissents were disclosed with a time lag of several weeks. That lag sometimes led to confusion about the context in which dissents were made.
"We decided to eliminate that potential source of misunderstanding, and, for a central bank, we made that decision relatively quickly," he said. "I am pleased with the Committee's quick response."
To be perfectly honest, I'm figuring that we are in for about a 10-15 year bear market. Sorry if this is a depressing concept, but I believe this is the truth. The Dow will probably end up around 3000 before this is all said and done. In fact, I'll pick some numbers right now.
Dow 3000, NASDAQ 750, S&P500 500. Within the next two years. This is, of course, predicted with my patented SWAG ("Scientific" Wild Assed Guess) method. Personally, I'm in cash and real estate right now. Stocks and bonds make me nervous.
Well, if we are in a 10-15 year bear market at least my kids will live long enough to see the market recover.
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