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Market Close

I heard a comment that watching the market the past couple of days has been as exciting as watching glue dry.  The indices drift a bit lower, but nothing earth-shattering.  On a day with no economic reports or major news, the market just wafted around like a feather in the wind. 

Some equities did OK, mostly the “usual suspect” groups in tech and solar.  Retail is having a last fling, as well.  No, I’m not very positive on retail.  Retail needs consumer money and that’s drying up, like it or not.  I’ve seen that some analysts are recommending retail stocks right now and I wonder what their investing time frame might be.  Buy retail stocks now and hold a week or two?  Or buy now and hold for years?  It would be nice if they would specify that time frame.

Just heard that Senator Dodd is calling for Treasury Secretary Paulson to clear up questions about his former employer’s role in originating securities related to subprime mortgages.  Apparently, a story in the New York Times raises questions about the activities of Goldman Sachs reportedly selling collateralized mortgage obligations (CMOs) while Paulson led the Wall Street firm.  The article says GS was selling short the very securities they were underwriting.  GS doesn’t deny this and says they disclosed that fact. The article says that if GS was “aggressively pushing subprime mortgages that they knew to be of concern while simultaneously shorting collateralized mortgage obligations”, then it could raise suspicions of why the Bush administration’s waited until recently to begin initiating a plan to help homeowners who took out subprime mortgages.  Sen. Dodd says that Paulson’s failure to address these concerns may lead to a formal investigation.

All I can say about this right now is, what a dog and pony show.  Sen. Dodd is a presidential contender, so take that for what it’s worth.  I’m totally unbiased concerning political parties, though. I don’t trust either side of the aisle these days.  The finger-pointing and the blame games haven’t even begun in earnest.  Lawyers are going to be having a field day, suing everyone in site for the losses suffered by investors. Attorney’s General in every state will be filing complaints on behalf of pension funds.  The news will be filled with one sad story after another about people who have lost everything.  Government officials will be calling for hearings.  Prepare yourself for a lot of righteous indignation by the accused, “categorically deny”-ing everything.  Hmm… I think I’ve read this book before….in the ’80’s (LTCM scandal)…..Enron…..yep, starting to see a pattern here.  This is just the beginning, not the end, of the financial fall out.  Fasten your seat belts, it’s going to be a bumpy year.