Tuesday, October 28th was a big day for Wall Street. The Dow jumped 889 points and retook 9000, and yet it was only the second biggest one-day jump this month. It’s been a bizarre and volatile October. But the market wasn’t as volatile today as it had been lately, so far Wall Street has extended yesterday’s huge gains since investors are growing more optimistic that an expected interest rate cut will help the economy toward recovery. I’m glad some people are optimistic, because I’m certainly not.
It’s not that I don’t think the Fed will cut rates, I think they will. But it’s already at 1.5% and it’s expected that they’ll lower them a further half a point, maybe even three quarters of a point. I just think that’s the wrong move, since artificially low interest rates are what got us in this mess in the first place. What if interest rates actually go below 1%? That’s insanity, and it doesn’t bode well for the economic future of this country. Either way, the decision should come out any minute now, so we’ll see what happens then. Commentary to come.
The national average price for a gallon of gas dropped 53 cents to $2.7785 last Friday, October 24th. That’s about $1.33 less than it was at it’s peak this past July.
Those prices come from a similar drop in the price of oil, which is down about $4 dollars a barrel on Friday the 24th. At one point on Friday, light crude dropped to $62.65, the lowest it’s been since May of 2007. Read the rest of this entry »
On October 3rd, a rumor that Apple CEO Steve Jobs had a heart attack sent Apple’s stock crashing down from $105.04 per share to $94.65 per share, equaling a loss of $9 billion in market value. All that in just 10 minutes. That shows how important Steve Jobs is to Apple. It also shows how fragile the market is at times.
Generally, when a fake news story has a substantial impact on the value of a company’s stock, the SEC gets involved. And that’s just what they did this time. Manipulating the value of a stock for your personal gain is a crime with some hefty penalties, so the SEC tried to trace the story and see if it’s originator had any financial reasons for starting the rumor. It turns out he didn’t.
The story made it’s way to CNN’s iReport.com, which is where it really started to hit the mainstream news, but it’s origin was a tad less respectable: an 18 year-old kid posting on 4Chan as a prank. Read the rest of this entry »
If you’ve been following along this financial crisis, listening to Common Sense investors like Peter Schiff and Jim Rogers; and keeping an eye on the commodity markets, you know that gold is where to be right now.
But it isn’t as easy to invest in gold as it is to invest in the stock market proper. Many people don’t even know where to start. And if you search online for information about investing in gold, often you’ll only find websites talking about benefits or disadvantages of investing in gold; without any black and white facts on how it’s done. Well, here you are: Read the rest of this entry »
Microsoft has recently launched an anti-piracy program that specifically targets Chinese computer users, and Chinese users are furious.
The “Windows Genuine Advantage” program turns the user’s screen black if the installed software fails a validation test. This could mean serious trouble for China’s 200 million computer users since the vast majority are believed to be using counterfeit software, whether they know it or not.
Dong Zhengwei, 35, a Beijing lawyer, described Microsoft as the “biggest hacker in China with its intrusion into users’ computer systems without their agreement or any judicial authority,” Read the rest of this entry »
This is a must watch for common sense investors. It’s absolutely imperative that people understand the ideas in these videos. In the United States, especially now, there is a dangerously widespread misunderstanding of what the free market is and how it really works.
Here at the Common Sense Investor, we’re going to start our multi-part series on the free market this week, including topics like spontaneous order and complex adaptive systems. These topics can help give people a better understanding of how the real free market works. We’ll try to make it as simple as possible, with plenty of videos and real world examples.
This past weekend, Editor-in-Chief of Slate, Jacob Weisberg, wrote an error-filled article titled “The End of Libertarianism”. The article is a disturbing look at the misunderstandings of the common media “intellectual”. Fortunately, intermediately after his article was published, an actual intellectual wrote a reply.
Jeffrey Miron, an economist lecturer at Harvard, filled in the missing bits from Weisberg’s bizarre account of history. Enjoy the show:
Whatever one’s views of libertarian policies, the incontrovertible fact is that the U.S. has not pursued such policies. Not in the past 10 years. Not in the past century. Indeed, except for a brief moment before Alexander Hamilton engineered the first U.S. bailout of financial markets, not ever. If the U.S. had truly been the “Libertarian Land” that Weisberg alleges, a huge range of policies that have helped fuel the current situation would have been radically different.
The current economic situation and the government’s response all center around one main issue: living within our means.
We have a fundamental choice: either we can work harder, produce more, and fuel our consumptive behavior, or we can start living within our means, pay as we go, and be smart investors.
Printing more green paper is not a productive act. Consuming more than we can afford is not a productive act. Investing blindly is not a productive act.
“Regarding the Great Depression, you’re right. We did it. We’re very sorry. But thanks to you we won’t do it again.”
-Actual quote from Ben Bernanke
There is an outstanding article over at the Motley Fool. It’s so good I have to re-print it here in it’s entirety. Read it and learn people. Read the rest of this entry »
Written by Vito Rispo on
October 17th, 2008. Posted in
Finance |
No Comments
