You may or may not be aware that stocks are down quite a bit this morning,
and, as ever, no one really has the foggiest notion why. David Gaffen, in a
market round-up headlined "What
Is Going On Around Here?", quotes one broker, Bill Frejlich, as saying
that "nobody has any idea what’s happening", which rings true
to me. But Gaffen still feels compelled to come up with a list of five possible
reasons for whatever it is that we’re seeing.
At the risk of getting a bit too philosophical here, there is a very good chance
that there simply is no reason why the markets are doing whatever it is that
they’re doing. And in any case causes and effects can be hard to differentiate
sometimes: if Crocs stock is down 30% today, is that a reason for the rest of
the stock market to fall, or is it simply a symptom of the broader sell-off?
As for the notorious report
on Citigroup from CIBC’s Meredith Whitney, I think one probably can reasonably
say that it caused some if not all of the sell-off in Citi stock. Whitney has
focused the spotlight on Citi’s damaged equity base, and that’s not something
which is going to cause the stock to rise. It is however refreshing to note
that the markets seem to care much more about Whitney’s serious-minded analysis
of Citi’s financial’s than they do about Kate
Kelly’s muckraking on the subject of what the CEO of Bear Stearns does in
his spare time.