Last week was a low for many. One of my friends got her wallet stolen at Borders (I know, how blatant is that?), many lost of lot of money in the markets and many more just feels blue for no particular reason. Even steak and chocolate failed to bring our spirits back up. Maybe it is because there hasn’t been any new TV shows out in a long time (where is Gossip Girl?) and they keep cutting the good shows (Lipstick Jungle, Dirty Sexy Money… and I hear that they might be cutting Privileged too!). Maybe it’s just that time of the year where everyone has the winter blues, because we have passed the holiday high, and there is still quite a bit to go before Spring. Or maybe it is everyone’s favourite excuse for feeling blue- the recession.
The market reached new lows since November last week. At the beginning there didn’t even seem to be any particular reason (very similar to how everyone just somehow felt blue). There was slight controversy when Berkshire’s portfolio was reported and it looked like Buffet had been selling America instead of buying it as he said he was doing. But I stand by that the argument that he sold J&J etc in order to raise funds for his GE and GS deal, which were obviously more lucrative (opportunity cost and all that). GM and Chrysler asked the government for more money again to survive. They should really just let them die. We will still need American banks in 20 years, but we can always buy Asian and European cars. There was also rumors that Citi (followed closely by BofA) was going to be nationalized this weekend, which didn’t seem like such an impossibility when Citi stock dropped below $2. As a result, all bank stocks plummeted like crazy Thursday and Friday morning (I watched Wells Fargo dropped from $12 to $9 in a few hours- seriously scary stuff!), until the government announced that they were all for the private bank structure and said that they were not looking to nationalize any banks this weekend. Since it would look pretty bad if the government DID nationalize Citi this weekend after that announcement, the market went back up a bit. Ironically, today (Sunday) there are rumors that Citi is pressing the government for another capital injection to increase their stake to up to 40% (or anywhere below 50%)- just short of a nationalization. Asia seems happy with this though and has rallied thus far.
This has probably all contributed to my winter blues (and consequently my writer’s block and thus my infrequent updates and completely random post about dying flowers). But one can only go up after reaching new lows right? Hopefully this will be a better week 🙂