Week of October 5, 2009

Boo!

October is always a scary time on Wall Street and La Salle Street. It started on October 24, 1929, Black Thursday and climaxed on October 29, Black Tuesday, when the stock market lost 13% in one day. By the time it was all over the market had lost 40% of its value between September and November and the Great Depression was underway. At it’s peak in 1933, US unemployment was near 25% and the lives of millions of people who had never owned a single share of stock were in tatters. The market… [ Read more ]

Week of September 28, 2009

One way or another, the logo you see above will be history as of Friday. It will be either replaced by a real Olympics Logo or simply be dispatched to the dustbin of history along with my 1984 and 2008 Cub’s World Series tickets. The news this morning is that President Obama will join his wife Michelle, Mayor Richard Daley, Oprah Winfrey, and many other prominent Chicago athletes, politicians, business and civic leaders in Copenhagen to twist the arms of IOC members who will decide Friday morning (Chicago time) who will host the 2016… [ Read more ]

Week of September 21, 2009

Trading CDS

vs.

We not talking about trading music CD’s, but something very different. Last year at this time we were hearing a lot about credit default swaps or CDS. A CDS is a contract where the buyer makes payments to the seller and in return receives a payout if the underlying credit instrument goes into default. The riskier the underlying loan or bond, the more expensive the premium the buyer must pay to the… [ Read more ]

Week of September 14, 2009

One Year Later

Emanuel and Mayer Lehman in the 1880′s, Lehman’s New York Office 1 Year Ago

One Year ago investment banking giant Lehman Brothers collapsed and started a chain reaction which almost destroyed the world’s financial system. Emanuel and Mayer Lehman began their firm as cotton traders in 1858 and were founding members of the New York Cotton Exchange. The company grew as a major commodities firm and the Lehman family moved into equities and joined the NYSE in 1887. 121 years later the company was destroyed by non-exchange traded, non-regulated, sub-prime mortgage… [ Read more ]

2008 Nobel Prize winning economist Paul Krugman wrote an extensive piece last week entitled “How Did Economists Get It So Wrong?”. The gist of the piece is that many economists had come to believe that the once divided science of economics had evolved into a field where there was unanimity of vision and theory. Particularly in macroeconomics, where free market disciples of Friedrich Hayek and Milton Friedman and the so-called Chicago school of economics had ruled the roost and dominated the Nobel Prize in economics. The belief in market economics had led some to believe… [ Read more ]

Week of September 7, 2009

Apple is throwing an “iPod Event” on 9/9/09, where it is expected to unveil the latest generation of iPods. This most certainly will mean iPods with cameras, but what else? The invitation (above) uses a line from a Rolling Stone classic which fuels speculation that the aging rockers might be there. Steve Jobs is expected to make his first public appearance since he took his medical leave after announcing his battle with liver cancer. Apple shares closed at 172.60 on the eve of the event and volume in the stock and its options… [ Read more ]