A horrible experience this year for investors got even worse this week. The losses in the major indices were material and new lows were set in this bear market move.
In fact, with the losses seen this week, the entirety of the gains recorded during the bull market move from the October 2002 low to the October 2007 high were wiped out at one point and the S&P fell to levels seen in 1997.
Uncertainty continued to be the albatross around the market's neck as some key corporate developments (or lack thereof) and a number of economic releases fed the market's concerns about not knowing how deep and how long this economic slowdown will last.
Among the more stunning developments this week was the collapse in Citigroup's (C) stock price. To be exact, Citigroup plummeted 60% to $3.77 per share, or nearly the equivalent of its ATM fee.
Balance sheet concerns were at the heart of the sell-off as burgeoning reports of growing weakness in the commercial loan category fanned fears that Citigroup, and the financial sector, would need to raise a lot more capital to offset losses.
Citigroup bore the brunt of the selling, though, as its management rankled investors Monday when it didn't indicate senior managers would forego bonuses this year, yet announced plans to cut up to 52,000 jobs from the bank's payroll.
That was dumb corporate development #1. Dumb corporate development #2 was the CEOs of the major U.S. auto makers flying to Washington on private jets to beg Congress for billions of dollars of taxpayer bridge financing to avoid bankruptcy.
No comments:
Post a Comment