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Daily Digest
Steve Decker cleans up in front of BankNorth on Wednesday.
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More Snow
The Berkshires received several inches of snow this morning, but not enough to close schools, unlike yesterday's sleety mess. Temperatures will drop into the 20s this afternoon. A few more snow showers are expected through the weekend. |
Duff'em If You've Got'em
 North Adams Regional Hospital went smoke-free Monday — so did all its sister sites, from Sweet Brook to Northern Berkshire Family Practice to the Women's Exchange. No ashtrays, no smoking: No butts about it. |
Wanted: Eagle Eyes
MassWildlife's annual eagle count runs Dec. 31 to Jan. 14. Anyone sighting one of the regal birds in Massachusetts is asked to participate.
Send date, time, location and town of eagle sightings, number of birds, whether juvenile or adult and observer's contact information to Mass.wildlife@state.ma.us. |
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Like to Write?
 iBerkshires accepts submissions about local events, news and opinion pieces. There are openings for freelance work, too, for qualified candidates. E-mail tdaniels@iberkshires.com to find out more. |
ObituariesRegionWhat's PlayingSales FliersColumnists | Independent Investor
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Other StuffMars Rovers Mark 5 Years
 Spirit and Opportunity have been trekking the red planet for half a decade. Spirit hit the 5-year mark on Sunday; Opportunity will on Jan. 24. |
Obama TransitionRelated Stories |
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@theMarket: Lions, Tigers, Bear Stearns; Oh My!By Bill Schmick - March 15, 2008
iBerkshires Columnist
At the End of the Week: Bears 3, Bulls 2
By Tuesday morning, I thought it was over. The S&P 500 was a mere three points above 1270, a critical level of support.
We faced the abyss, teetering on the edge of another 8 to 10 percent decline in the market and then, like an angel from the sky, Ben Bernanke appeared with yet another $200 billion bail out plan.
By the end of the day the S&P was up 3.7 percent to 1320, well out of the danger zone of 1270-1300.
"Not fair, not fair," grumbled the bears as they covered their shorts but by Friday the market's gains were whittled away to 1288, five points lower than where we started the week. The Dow and NASDAQ actually gained a smidgeon.
Certainly Bear Sterns, caught in the woes of subprime lending, helped squash any upward momentum. The big investment bank finally came clean (after repeatedly denying rumors all week) and admitted they were having liquidity problems. That slammed the market back down into the danger zone on Friday.
But neither bulls nor bears were able to score a knock-out blow as the bell rang at week's end. The S&P 500 closed at 1288 managing to hold support but just barely. From a purely technical perspective, this week saw a second successful testing of the bottom put in back in January.
By now, it should be clear to all of us that the bulls have the full weight and authority of you, the taxpayer, behind them in the form of the Federal Reserve Bank and the government. To date, my rough estimate is that the Fed has already dumped half a trillion dollars into this meltdown on your behalf.
That's about half the cost of the Iraq War in a much shorter time period. Believe me, we will pay for this in the future through higher interest rates and higher taxes.
Next week round three begins. Count on the Fed to cut interest rates again on or before Wednesday regardless of what happens in the market. Also expect a concerted global central bank intervention to stem the continued fall of the dollar.
It won't stop the decline unless it is more than a one-off deal. If past interventions are any guide the most it will do is give speculators the opportunity to sell more dollars at a higher price. Interventions have been know to work however, but only through persistent and long-term efforts coupled with changing economic fundamentals.
Commodities should see some volatility as well next week after both oil and goal rose to record highs. I believe most commodities will continue to climb the proverbial "wall of worry" but not without some sharp pullbacks. My short-term price target for oil is $116 a barrel while natural gas should see $13 mmbtu, or million British thermal units, before all is said and done. The gold price is a bit more difficult to fathom now that it has topped $1,000 an ounce. I am convinced it's in a long-term bull market as are most commodities, however, both gold and oil will react negatively if there is a currency intervention in the short-term
As for stocks, my advice: wait and see. Don't be a hero here. There are still plenty of lions and tigers and companies like Bear Sterns lurking in these woods, Dorothy. Although the contrarian in me whispers, "nibble, nibble," I will resist for just a bit longer.
Bill Schmick is a licensed investment adviser representative and portfolio strategist with Berkshire-based Dion Money Management, managing over $800 million for middle class Americans from coast to coast. Direct your inquires to Bill at 1-877-850-7942, Ext. 146, (toll free) or e-mail him at wschmick@dionmm.com. You can also visit www.afewdollarsmore.com for more of Bill's insight. |
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