Tuesday, November 11, 2008

GM, GS and Energy

  • The stock market made a nice reversal mid-day, but now seems to be settling back into the big malaise. The talk today is of $GM and $GS.  "Stock tickers that begin with G, Alex."
  • Deutsche Bank downgrades $GM shares from hold to sell.  Nice timing, fellas.  The stock is at the lowest price since 1943. 
  • If you watch bubblevision, everyone always seems to think that $GS is a buy.  Perhaps because Goldman Sachs contains the letters that spell GOLD.  Well, almost everyone.  Shares are up today despite a cut in estimates.  And the consensus recommendation right now is hold.
  • Larry Kudlow writes Mustard Seed, where he points out that while everyone seems to be expecting a big 3-4% 4th-quarter contraction, no one seems to be paying attention to what has happened with energy prices.  $200 billion drop in energy costs for consumers.  It's like a tax cut!  Maybe that's why I've seen restaurants and casinos crowded the last few times I've been out.  Very crowded.
  • You figure folks were paying $80 a week to fill up their gas tank in June, and now they're paying $40 a week. That's an extra $40 a week to spend somewhere.  And since the bank foreclosed on their homes, they are back to renting and have smaller monthly expenses and more money to spend.