Idiot of the Day; September 15th, 2008

One of John McCain’s economic advisers wins with the title of his editorial in yesterday’s Washington Post. I just don’t think he was paying attention. Talk about terrible timing.

A NATION OF EXAGGERATORS

Quit Doling Out That Bad-Economy Line

A nation of exaggerators….Let me just remind everyone, for emphasis:

An Honest Question:

Given the circumstances of the economy right now, I am truly curious about what McCain is referring to when he says that the fundamentals of the economy are strong. I understand that he has a stated ignorance of economic issues, but I want to know what it is that he would point to when asked what those fundamentals are. I think it could be an interesting debate- essentially, what statistics matter when assessing the health of the economy. Any guidance on this topic would be of great use.

A Visual Representation of the Week:

The Wreckage:

Care of Bloomberg:

The S&P 500 declined 47.60 points, or 3.8 percent, to 1,204.10 at 3:49 p.m. in New York, the lowest level since November 2005. Its retreat was the biggest in six years, when shares tumbled in the wake of WorldCom Inc.’s bankruptcy. The Dow Jones Industrial Average tumbled 408.57, or 3.6 percent, to 11,013.42. The dollar weakened the most against the yen since August 2007 and Treasuries surged.

It was the worst single day since 9/11. The only positive is that oil prices dropped about five dollars (in light of the obviously weakening U.S. economy = lower demand).

UPDATE:  Trader here at the close of the trading day with your update.  It wasn’t pretty today, not in any way, shape or form.  The Dow closed down 504.48 points, or 4.42% to close at an abyssmal 10,917.51.  Lehman Brothers Holdings, after filing for Chapter 11 bankruptcy protection, was down 3.44, or 94.25%, to close at 21cents a share.  Granted, this was expected with what happened last night, but it is still messed up to see what was once a strong firm looking like this.  AIG, the compnay that, at least for now, pays my salary, plummetted $7.38, or 60.79%, to close at $4.76, its lowest price since June, 1988.  The dollar weakened the most against the yen in a decade.  A DECADE!!!

You have major dropoff around the board.  I heard a stat today:  for every one stock that gained value today, more than 24 fell…roll that over a few times and just let it sink in…

This is truly a day that, years from now, people will look back and say, “Remember where you were when…”

Typewriters, Baby, Typewriters!

Thomas Friedman at the International Herald Tribune:

Why would Republicans, the party of business, want to focus our country on breathing life into a 19th-century technology – fossil fuels – rather than giving birth to a 21st-century technology – renewable energy? As I have argued before, it reminds me of someone who, on the eve of the IT revolution – on the eve of PCs and the Internet – is pounding the table for America to make more IBM typewriters and carbon paper. “Typewriters, baby, typewriters.”

And people buy this BS! Depressing.

McCain’s Take

My question is what he means by the fundamentals are strong. He’s said it a few times and I am curious as to what those fundamentals are (unemployment? payrolls? stock prices? strength of the dollar?). Anyone have a clue?

Just a Rumor

Rumors are swirling that Warren Buffet may be making a move to purchase AIG.  More as the story deveolps…

And It Happened:

They made it official just now:

Lehman Brothers Holdings Inc. (“LBHI”) announced today that it intends to file a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York. None of the broker-dealer subsidiaries or other subsidiaries of LBHI will be included in the Chapter 11 filing and all of the broker-dealers will continue to operate. Customers of Lehman Brothers, including customers of its wholly owned subsidiary, Neuberger Berman Holdings, LLC, may continue to trade or take other actions with respect to their accounts.

Go to Lehman Press Release (PDF) »

All I can say is wow. Could you have imagined that Lehman would be filing for Chapter 11- even two weeks ago. All I can say is, David Einhorn must be feeling great right now. Then again, he may want to lay low for awhile. I can imagine there are a number of soon-to-be-unemployed Lehman Brothers (and Sisters) looking for the source of their idleness.

On Bush (Remember Him?) and Questions

David Frum at the National Review relates this insight about President Bush:

Somebody who knew President Bush well once remarked to me. “You’ll notice he never asks questions.”

“Why not?” I said.

“Because he doesn’t know what it’s okay for him not to know.”

The article has some interesting analysis of Palin’s interview- and what Presidents should and do not have to know. In any case, I throw Palin into the above category that Bush currently occupies.