August 9th, 2007

Stock Market

Credit Market Bubble of 2007

Ugh.  Stupid French.

BNP Paribas, which said last week that their exposure to the US subprime market was "absolutely negligible", set off a major retreat in the markets today when they froze three of their hedge funds because of credit concerns.  The Dow Jones Industrial Average fell 387 points, 2.8%, and the S&P 500 fell nearly 3%.  The NASDAQ managed to pull off a morning rally back into positive territory before getting mauled by the bears, ending the day down 2.16%.  The VIX (Volatility Index) hit 26.90, its highest point since 2003.  Declines outnumbered advances 4 to 1 on the big board.

On my end, I lost over $3,200 today, my worst market performance to date.  About half of that came from Apple, whose shares fell 5.7%.  Beta of 1.1, my ass!

There are a couple bright spots, however.  Most of the analysts on CNBC seemed to agree that the most recent bear attack was mostly fear-related.  There's not really anything wrong with the economy or the stock market, it's just people started panicking.

I also recently discovered a way to cash in on the bears without having to resort to tricky options or risky margins.  The relatively new Proshares Ultrashort ETF series uses short-selling to make money when the market is down.  I only discovered them this afternoon, too late to really recoup much of my losses, but I now know that I can ride out bear markets and still make a profit.

Tomorrow should be fun.  Not.   The Dow has closed down the last three Fridays, and ended last week with a massive 300 point drop.  I'll need to wake up early to follow the action all day.
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    annoyed annoyed
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