Page Perry's Market Monitor - November 7 , 2008
There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:
• On Monday, the Dow Jones Industrial Average dropped by 5 points.
• On Tuesday, the Dow Jones Industrial Average jumped 306 points.
• On Wednesday, the Dow Jones Industrial Average lost 486 points.
• On Thursday, the Dow Jones Industrial Average lost another 443 points.
• On Friday, the Dow Jones Industrial Average rose 248 points and closed the week at 8943.
• On Tuesday, Barrack Obama was elected the 44th President of the United States.
• Circuit City announced that it would close 155 stores.
• Mattel , the toy maker, announced it was cutting 1,000 jobs.
• Ford posted a $129 million loss and said it would cut approximately 2,260 white-collar jobs.
• General Motors lost $2.5 billion in the third quarter and warned it could run out of cash in 2009.
• Manufacturing activity has fallen to a 26 year low.
• Japan has approved a $275 billion stimulus plan.
• Wilshire Associates reported that, on average, state pension plans lost 14.9% in the twelve-month period ending September 30.
• Major retailers reported the biggest decline in October sales in almost four decades.
• Part of the billions of dollars that the government has provided to bailout Wall Street may be used by the financial firms to pay the $40 billion or so that the firms owe to their executives for past years’ pensions and pay.
• The U.S. Labor Department reported that the unemployment rate jumped to 6.5% in October. In addition, the Labor Department noted that the number of people drawing unemployment benefits increased by 122,000 to 3.84 million in October.
• In 2008, the economy has experienced 1.2 million lost jobs.
• Despite all of Merrill Lynch’s problems, the company has set aside $6.7 billion to pay bonuses in 2008. Apparently poor performance does pay on Wall Street.
• The Financial Times estimates that as many as one-third of all hedge funds could be forced to liquidate. Noted economist Nouriel Roubini also predicts that “hundreds of hedge funds will go bust.”
• The government has closed down two more banks – the Franklin Bank in Houston and Security Pacific Bank in Los Angeles. This raises the number of banks that have been closed this year to 19.
• Berkshire Hathaway reported a 77% drop in third-quarter earnings.
Page Perry’s Market Monitor is published periodically to give investors an overview of certain recent developments impacting the economy and/or the investment markets.
