Going to Amsterdam or Paris?

You can sit in this shit for $1,000 round trip!

BA Open Skies is having an insane sale. I don't mean to schill for them. It's really just a favor (like this post)--an attempt to save you from the hell of flying Air India from JFK to CDG and getting bumped 24 hours to the next flight out (true story!).

Oops, I Did it Again: RSI Hits 30

The historic RSI (which has only gone below 30 on 3 previous occasions: 1929, 1973, and 2002) suggests we have hit the bottom.

WTF's the RSI?

...it's a technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. It is calculated using the following formula:

RSI = 100 - (100/1+RS)
(where RS = Average of x days' up closes / Average of x days' down closes)

The RSI ranges from 0 to 100. An asset is deemed to be overbought once the RSI approaches the 70 level, meaning that it may be getting overvalued and is a good candidate for a pullback. Likewise, if the RSI approaches 30, it is an indication that the asset may be getting oversold and therefore likely to become undervalued.

Some Charts From the NY Times

Commercial paper is short-term debt issued primarily by banks and large businesses, often just for a few days. The rate shown here is for "top-tier" companies, or those with the best credit ratings. High rates have made it more difficult for business to obtain the money they need for everyday expenses.

_______________________________________

Higher bond yields indicate less willingness to lend to businesses. Yields on junk bonds have jumped, signaling an aversion to risk.

_______________________________________

Libor--the London Interbank Offered Rate--is what banks charge one another for short-term loans. It is the basis for many financial contracts--including home mortgages and student loans--and it is a sign of whether banks trust each other. Higher rates mean banks are less willing to lend to one another.

_______________________________________

The difference between Treasury bills and a three-month Libor is a measure of stress in the credit markets. By historical standards, the spread has been high all year: it averaged about 25 basis points (0.25%) from 2002 to 2006. Higher spreads are signs of anxiety.

_______________________________________

Investors have taken money out of stocks, bonds, and money market funds to buy safe assets, forcing the yield on short-term Treasury bills down. A lower yield indicates greater concern about the financial system.

Joel Kotkin on NYC Real Estate

The Observer sits down with Joel Kotkin, the author of The City: A Global History and an authority on urban social trends. The 55-year-old took some time on a recent visit from L.A. to talk about what’s to become of his native New York in a post-boom universe.

"You know, I was walking around the corner [in the Flatiron district], the two-bedroom apartments were still $3,000, $4,000 [monthly]. I mean, who’s got that kind of money?

So, if the prices were allowed to drop, what would happen? More of the young people who are now leaving New York in their 30s might stay; the immigrants who are now leaving New York once they get their feet on the ground, they might stay. You could see a similar scenario as to what happened in L.A. in the ’90s and Houston in the ’80s—which is, the drop in property prices allowed people an opportunity to get into a market that became very affordable. … In L.A. after the ’90s, after the riots and earthquakes and everything, what happened? The middle-class people were finally able to afford nice houses that they could never afford before; and immigrants went and bought everything that wasn’t nailed down."

Give the Man a Greencard!

In this week's installment of Give the Man a Greencard, DOWWTF?! goes out on a limb to nominate a New York-based start up that's gearing up to market purchase-supported social gaming software for mobile devices.

Specifics and development specs are tightly under-wraps, but Michael Dory, Adam Simon, Scott Varland, and Mihir Dange make a great team, and from what we've heard here at DOW WTF?!, the concept they've come up with will be crack cocaine to the masses of FaceBook addicts. Check back for more details as they emerge...

Lehman Settles CDSs for 8.625 Cents on the Dollar

From the Journal...

"The recovery rate on the bankrupt firm's senior debt was fixed at 8.625 cents on the dollar, just below the 9.75 cents published in the first estimate Friday. That means the sellers of insurance on these defaulted bonds are on the hook for the remaining 91.375 cents. That's well above the approximate 88 cents envisaged earlier this week, when increased demand for paper to present in return for compensation inflated the market price."

This isn't making big waves in the financial media yet, despite the fact that everyone in-the-know was well cued up for this. That's an unexpected good sign.

WHO'S ON FIRST?

In the event that you happening to be managing a bunch of cash for a group of rich Saudis, here's something to look out for...

Floyd Norris notes of the current cratering of market indexes that,

"Some of this is no doubt overdone, as the need to cut leverage forces investors to sell the good with the bad. When a bottom does come, the ensuing rally could be explosive."

To date, tax-refund checks, massive government-sponsored bailouts, interest-rate cuts (remember when that was big news? How quaint!), and $10+ Buffet-backed billion have been thrown at the crisis, to no avail. But there's got to be a bottom to sinking equity markets. At the moment, it doesn't look like individual and institutional investors will be the first to call the bottom and move into the market. Instead, expect deals like these...

"The recent plunge in the market value of BlackBerry maker Research In Motion could leave the company vulnerable to a takeover from a well-capitalized buyer such as Microsoft Corp.

RIM's shares, which were worth more than $148 on the Nasdaq market just four months ago, now are trading around the $60 mark amid the U.S. financial crisis and margin pressures the company is experiencing because of expenses related to launching new smartphones." (Full Reuters piece here.)

Microsoft's ability to complete the transaction without credit would only amplify the, in effect, already discounted RIM shares. As Mark McQueen, chief executive of Wellington Financial LP in Toronto, observes, "If you did a stock and cash deal, you wouldn't need to tap the credit markets."