Monday, July 27, 2009
Part 2 - What was going through the minds of CEOs, corporate boards, fund managers & mortgage lenders as they created derivatives that Warren Buffett called “financial weapons of mass destruction"?
The CHART OF THE DAY shows 84 percent as many shares changed hands daily on the New York Stock Exchange between May 1 and July 20, compared with the average from Jan. 1 to April 30. That’s the steepest slowdown since at least 1989, according to data compiled by Harrison, New York-based research firm Bespoke Investment Group LLC.
Trading on the NYSE was the slowest of the year on June 12 as the S&P 500 climbed to a seven-month high. The benchmark index for U.S. stocks then dropped 7.1 percent through July 10, when investor optimism on the equity market fell to the lowest level since March, according to data compiled by Bloomberg. The S&P 500 is up 44 percent since March 9. (more)
Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton will host two days of meetings spanning topics from the economic crisis to North Korea. The Strategic and Economic Dialogue is the Obama administration’s first with China. (more)
"A lot of things happened, a lot came together, [and] created probably the worst financial crisis, certainly since the Great Depression and possibly even including the Great Depression," Bernanke said at the start of a town-hall meeting in Kansas City.
Bernanke defended the Fed's extraordinary moves, which have included slashing interest rates to zero, pumping billions of dollars to keep credit markets open, and buying Treasurys and mortgage debt to keep long-term interest rates low.
"I was not going to be the Federal Reserve chairman who presided over the second Great Depression," he said. (more)