Todd Harrison: Let the earth shake -- you shouldn't
An earthquake rolled through New York City this week; on Wall Street, it was par for the course.
While most view the summer stretch as a welcome respite, the stock market has been a wild ride. My back-of-the-envelope math dictates the Dow Jones industrial average endured over 10,000 points of intraday swings in the month of August alone. That’s nuttier than Austin Power’s coffee!
As financial-market fatigue permeates, my forward lens continues to incrementally shift from what was (the causal effect of the crisis) through what is (the enormity of the financial condition) toward what will be (generational opportunities on the other side of this second storm).
Some Random Thoughts, in no particular order:
• I can finally see a light at the end of the tunnel that isn’t affixed to the front of a train; we just need to go through it to get through it, and you know it won’t come easy.
• Gold got clipped for 10% in a few short sessions this week; while margin hikes in the commodity are partially responsible, the price action may be signaling that QE3 doesn’t have the political will to pass.• Steve Jobs is a digital Da Vinci; his historic technological innovations forever changed the world. One could argue Apple will still be a great company, but it’s hard to imagine it will be a better company without his leadership.
• The word to watch overseas is “Eurobonds.” While there is a political dogfight in Europe over this proposed initiative (Germany is staunchly opposed), it could conceivably buy time for troubled eurozone nations to get their financial house in order.
• Warren Buffett’s Berkshire Hathaway injected $5 billion into Bank of America Thursday for a boatload of cumulative preferred shares and warrants to buy an additional 700 million shares. As is often the case in the marketplace, the reaction to the news will be more telling than the news itself.
Todd Harrison is the author of "The Other Side of Wall Street" and the founder and CEO of Minyanville, an Emmy Award-winning financial media platform. Read him daily at www.minyanville.com.