Barron’s (May 8)
The BP oil disaster illustrates Murphy’s Law: everything going wrong at the worst possible time. With over 30,000 wells drilled, the Gulf of Mexico provides 30% of the energy produced in the U.S. Barron’s recently cheered Barack Obama when he pledged to open some new areas to offshore drilling. BP’s still unfolding catastrophe in the Gulf will, however, prompt calls to backtrack. Rare catastrophes will strike, “but restricting the development of the offshore-energy industry will not help the state or the country.”
The BP oil disaster illustrates Murphy’s Law: everything going wrong at the worst possible time. With over 30,000 wells drilled, the Gulf of Mexico provides 30% of the energy produced in the U.S. Barron’s recently cheered Barack Obama when he pledged to open some new areas to offshore drilling. BP’s still unfolding catastrophe in the Gulf will, however, prompt calls to backtrack. Rare catastrophes will strike, “but restricting the development of the offshore-energy industry will not help the state or the country.”
Tags: BP, Gulf of Mexico, Obama, Oil
New York Times (May 7)
At 2:42 yesterday, the Dow Jones Industrial Average (DJIA) went into freefall. By 2:47, the DJIA recorded its greatest ever intraday point drop. Individual stocks experienced even greater volatility. Procter & Gamble fell 37%. Accenture dropped from $40 to $0.01. The New York Times says the panic was the result of “one part nervous traders, one part Greek crisis and one part trader error.” After falling more than 1,000 points, the DJIA largely recovered, closing down 347.80 points. The SEC and major stock exchanges have launched an investigation into the “unusual trading activity.”
At 2:42 yesterday, the Dow Jones Industrial Average (DJIA) went into freefall. By 2:47, the DJIA recorded its greatest ever intraday point drop. Individual stocks experienced even greater volatility. Procter & Gamble fell 37%. Accenture dropped from $40 to $0.01. The New York Times says the panic was the result of “one part nervous traders, one part Greek crisis and one part trader error.” After falling more than 1,000 points, the DJIA largely recovered, closing down 347.80 points. The SEC and major stock exchanges have launched an investigation into the “unusual trading activity.”
Tags: Dow Jones, Greek crisis, Panic trading, SEC
The Times (May 6)
With voters heading to the polls in a race that’s too close to call, The Times calls the election “historic in both style and substance.” Most had assumed the election would be “dominated by apathy and indifference.” Instead, the election has proven “deeply invigorating.” With Britain both at war and facing economic uncertainty, The Times proclaims, “this is the most important election for a generation.”
With voters heading to the polls in a race that’s too close to call, The Times calls the election “historic in both style and substance.” Most had assumed the election would be “dominated by apathy and indifference.” Instead, the election has proven “deeply invigorating.” With Britain both at war and facing economic uncertainty, The Times proclaims, “this is the most important election for a generation.”
Wall Street Journal (May 5)
Like the market, the Wall Street Journal is calling the €110 billion Greek rescue package “a flop.” Contagion has continued to spread with the euro sinking in value and European stock markets down nearly 3%. At the heart of the matter, however, lies a simple explanation: “Greece is well and truly bankrupt.” This is no mere crisis of market confidence or psychology. Greece will not be able to repay all of its debts on time.
Like the market, the Wall Street Journal is calling the €110 billion Greek rescue package “a flop.” Contagion has continued to spread with the euro sinking in value and European stock markets down nearly 3%. At the heart of the matter, however, lies a simple explanation: “Greece is well and truly bankrupt.” This is no mere crisis of market confidence or psychology. Greece will not be able to repay all of its debts on time.
Tags: Contagion, Europe, Greek crisis
New York Times (May 2)
Lashing out at Wall Street Banks is now an American pastime, but the credit ratings agencies “bear as much responsibility for the financial crisis as the banks.” Largely forgotten is the role Moody’s, S&P and Fitch played. Investors and financial institutions would never have purchased as many mortgage-backed securities and collateralized debt obligations (CDO’s) had the raters properly warned investors that these were essentially “high-tech junk bonds,” rather than triple-A securities. Current proposals aimed at reforming the ratings agencies are not enough. The newspaper supports drastic steps to improve the ratings system.
Lashing out at Wall Street Banks is now an American pastime, but the credit ratings agencies “bear as much responsibility for the financial crisis as the banks.”
Largely forgotten is the role Moody’s, S&P and Fitch played. Investors and financial institutions would never have purchased as many mortgage-backed securities and collateralized debt obligations (CDO’s) had the raters properly warned investors that these were essentially “high-tech junk bonds,” rather than triple-A securities. Current proposals aimed at reforming the ratings agencies are not enough. The newspaper supports drastic steps to improve the ratings system.
Tags: Banks, CDOs, Fitch, MBS, Moody's, NRSROs, Ratings agencies, S&P, U.S., Wall Street
