Interesting Thoughts for the Day

By Jerry Slusiewicz | July 29, 2008 | 5:02 PM | 0 Comments

Merrill announced their earnings on July 17^th, not quite two weeks ago.  Financial stocks of every ilk have had a huge jump up in price since then.  I ask, what's a few billion dollars of new losses amongst friends?     Apparently not a lot, as we see Merrill writing down another $6 billion today, and raising $8.5 billion of fresh capital to dilute their existing shareholders equity.  The rush to forgiveness astounds me.  This is the same firm that less than a couple weeks ago valued some of these assets at $11 billion that were sold for $6 billion.  I thought the values went up the last couple weeks.  Did they not see this coming on July 17^th? 

Oh and oil must be down over 17% because global demand must have dropped by that amount in the last two weeks.  It couldn't have been the speculators - could it?  Excuse my sarcasm but the markets are clearly in a cross current.  I highly doubt that the trouble for housing and therefore financials ended with Merrill's new, new write downs.  I also doubt that current oil prices have anything to do with today's global demand.

We are heading into the monthly strength period for the market when 401k monies hit the mutual fund companies.  It will be interesting how far the next run takes us.