On Tuesday, Treasury Secretary Henry Paulson and members of Congress clashed over the best use for the $700-billion financial bailout fund, with lawmakers demanding money to stem a national wave of mortgage foreclosures.

At a House of Representatives Financial Services Committee hearing where he was grilled over his handling of the program, Paulson said the bailout plan wasn't "a panacea for all our economic difficulties" and would be more effectively used by investing in financial companies to shore up the system.

"The rescue package was not intended to be an economic stimulus or an economic recovery package. It was intended to shore up the foundation of our economy by stabilizing the financial system," the Treasury chief insisted.

November 12, 2008

"Hold on, we're in for a bumpy ride!" is the familiar saying that comes to mind right now in the markets. More bad news keeps coming despite all the government interventions and eye-popping money being thrown at the worst financial crisis our country has faced in the last 80 years.

Stocks fell to their lowest levels since late October today after bad news from Best Buy (BBY) and Macy's (M) and many negative reactions to changes in the government's financial rescue program.

November 10, 2008 -

ETF stands for exchange-traded funds. ETF's are a lot like mutual funds but trade throughout the day very much like normal stocks. ETF's are index-based, representing baskets of stocks, bonds or other assets and are often lower-cost than comparable index-based mutual funds.

Unlike open-ended funds, which buy back their own shares, ETF owners can sell their funds to anyone in the stock market who is willing to buy them. Also higher levels of transparency make an ETF investment trade much closer to its actual value than a regular mutual fund.

For a long time mutual funds have made it easy for ordinary investors to invest modest amounts of capital to achieve a diversified portfolio of stocks, but ETF are a new way to achieve that same goal with trading flexibility not found with mutual funds.

November 6, 2008 -

After the euphoria and history of the election of Barack Obama, the United State's first African American president, markets were quick to get back to the business at hand, ie. pricing in the negative effects of a prolonged recession into the market. There are probably lots of great things in store for the U.S. and world as we usher in a new president 2+ months from now, but the markets are looking at "now" and trying to see a glimmer of a light at the end of the long dark tunnel we are in at the moment.

After a pre-election multi-day "Rally-of-Hope" starting on October 27th culminating with the presidential election on Tuesday, the last two days have seen more blood in the water as the major indexes dropped precipitously for two consecutive days in a row resulting in the biggest two day slump since 1987. The market drop reflects the markets coming back to reality land in digesting mounting disappointment in corporate earnings and projections, and bleak sales data coming from major retailers fueling fear of a worsening economic downturn.

November 3, 2008 -

At the end of the day on Friday I walked outside as the closing bell rang and I swear I could hear the universe exhaling with a collective sigh of relief ending one of the most volitile months ever in the U.S. and global markets.

October saw some of the biggest single-day point drops and single-day point gains ever seen in the market, and overall one of the worst months since the 1987 meltdown. Then in the last week of October we saw one of the best weeks in almost 34 years. The huge gains of the final week were reminiscent of the sharp recoveries from bear market lows in 1974 and 1982. Both of those moves came while the economy was mired in recession, as it almost certainly is now. Last week, the Dow and the Nasdaq each rose 11%, while the S&P 500 gained 10.5%.

October 29, 2008

Feds Cut Interest Rate Half a Point

On Wednesday Oct 29, the Federal Reserve slashed a key interest rate by half a percentage point as it seeks to revive an economy rocked by the worst financial crisis in the better part of the last century. U.S. stocks dropped in the final minutes of trading on concerns that the Federal Reserve's sixth interest- rate cut this year isn't enough to rescue the economy.

The Standard & Poor's 500 Index lost 10.42 points, or 1.1 percent, to 930.09, one day after surging 11 percent. The Dow average slumped 74.16, or 0.8 percent, to 8,990.96. Three stocks gained for every two that fell on the New York Stock Exchange.