WTF Has Happened So Far

S&P performance over the past 12 months...

Consumer staples, down 14.7% in October, down 16.2% for the 12 months
Health Care, down 17.5% in October, down 30.6% for the 12 months
Utilities, down 18.6% in October, down 35.0% for the 12 months
Telecommunications, down 19.3% in October, down 48.1% for the 12 months
Information Technology, down 19.9% in October, down 40.9% for the 12 months
Materials, down 21.8% in October, down 41.7% for the 12 months
Industrials, down 21.9% in October, down 43.7% for the 12 months
Consumer discretionary, down 23.2% in October, down 43.2% for the 12 months
Energy, down 24.5% in October, down 36.9% for the 12 months
Financials, down 31.9% in October, down 61.7% for the 12 months

Global markets, year-to-date...and the winner is...Isreal...

United States, down 38%
Canada, down 41%
Mexico, down 45%
Brazil, down 55%
Argentina, down 42%
Chile, down 41%
Peru, down 52%
Britain, down 47%
Germany, down 49%
France, down 47%
Spain, down 44%
Switzerland, down 35%
Italy, down 51%
Portugal, down 51%
Iceland, down 73%
Ireland, down 61%
Netherlands, down 53%
Belgium, down 52%
Denmark, down 44%
Finland, down 54%
Norway, down 55%
Sweden, down 48%
Greece, down 58%
Austria, down 60%
Poland, down 48%
Russia, down 65%
Hungary, down 54%
Ukraine, down 74%
Lithuania, down 55%
Turkey, down 57%
South Africa, down 48%
Israel, down 30%
Japan, down 39%
Hong Kong, down 47%
China, down 57%
Taiwan, down 40%
South Korea, down 53%
Australia, down 53%
Singapore, down 45%
India, down 58%
Indonesia, down 50%
Malaysia, down 39%
New Zealand, down 46%
Philippines, down 50%
Pakistan, down 49%
Vietnam, down 61%

WTF?!

Excellent summary from Sequoia Capital. Click the 'right' arrow to advance the slideshow...

Sequoia Capital on startups and the economic downturn

View SlideShare presentation or Upload your own. (tags: depression recession)

Dwight Cass on Lehman CDSs Today

We should know how this pans out by 2pm EST today...

"Lehman, which filed for bankruptcy in mid-September, has about $113bn of bonds outstanding, according to Reuters Knowledge. It’s impossible to know how much protection has been written on that debt, since credit derivatives are privately negotiated and not all protection buyers hold the underlying debt. It’s likely that the amount of CDS linked to Lehman is at least several times the size of its borrowings.

The Lehman CDS auction process is set for Friday [today]. Large amounts of cash are likely to change hands as a result. But since there’s a winner for every loser in this market, the net effect on the financial system should be minimal. Except that no-one knows if all the losers will be able to pay – and that’s what has Wall Street worried."

Full piece here.

Remember Hearst

In 1929, the plans for the Hearst skyscraper in New York were curtailed to 6 stories. For the next 77 years, the building remained a squat profile until the Norman Foster addition was added in 2006.

Down the street from DOWWTF?!, at the corner of 8th Ave and Greenwich Ave, construction is now under way on One Jackson Square, an 11 story luxury condominium, asking $6 million for 2 bedroom units. So far, concrete has been poured on 4 of the 11 story units, not all of which have been sold.

I suspect many of the pre-sold contracts cannot be dissolved, but if no fools step up to buy the remaining units, and if some of the existing contracts don't come through, and people pull out (as has been the trend in Las Vegas for over two years), the corner of 8th and Greenwich may not look like the developers hope...

Lehman and the CDSs

Busy here, so I'm quickly going to quote (rip off) FT, Rueters, and Barry Ritholtz...

Banks are hoarding cash in expectation of pay-outs on up to $400bn of defaulted credit derivatives linked to Lehman Brothers and other institutions, according to analysts and -dealers.

This added pressure on the frozen financial system comes as authorities prepare to meet participants in the so-far unregulated $54,000bn credit derivatives market to speed up plans for the creation of a central clearing house.

The Federal Reserve will meet dealers, investors and exchange executives in New York today. Although big dealers had committed to setting up a central counterparty by the end of the year, urgency has increased in light of the collapse of banks around the world and as company bankruptcies loom.

"The New York Fed will hold a meeting [today] with a small number of banks and buyside firms to discuss the progress being made toward the creation of a central counterparty for credit default swaps," said a Fed official, adding that this would "help reduce systemic risk associated with counterparty credit exposure and improve how the failure of a major participant would be addressed".

So what does that mean? Tomorrow...

Twenty-two dealers will participate in the auctions, which will determine how much protection sellers will recover after paying out the insurance. The timeline for the auctions follows, according to JPMorgan.

9:45 a.m.-10 a.m. Auction participants will submit bids and offers for the debt backing the credit default swaps, which will be used to determine the initial recovery rate of the swaps.

10:30 a.m. Auction administrators Creditex and Markit will publish the initial recovery price and the open interest for the contracts will be published. The open interest reflects the amount of bids and offers that have been made, and will show if there are more buyers than sellers, or vice versa.

12:45 p.m. -1 p.m. Participating dealers will submit limit orders for the debt on behalf of themselves and their clients to fill the open interest

2 p.m. The final price of the auction will be published.

Permalink: http://dowwtf.blogspot.com/2008/10/lehman-and-cdss.html

McCain Steps Up the Crap

As McCain lowers himself further into the gutter, drawing attention to Obama's middle name and his association with William Ayers, let's take a moment to examine the electorate for whom this will make a difference...

BA, 777, 26 A/K

If you're flying economy on a route that's covered by a British Airways, Boeing 777, take seat A or K in row 26. You get 6 feet of leg room, and a ledge to put your feet up on.

Permalink: http://dowwtf.blogspot.com/2008/10/ba-777-26-aj.html