What are margin calls? The term has been bandied about lately as being one of the reasons for the steep declines in the market. Basically, it’s when depositor’s margin account at a brokerage falls below minimum levels and the brokerage tells the depositor to either deposit more money or they have to sell off some of their holdings. And a spate of selling drives down stock prices because as supply increases, prices drop. But why are there margin accounts and why are brokerages making margin calls in the first place? Marketplace’s ever-salubrious Paddy Hirsch explains with girl scouts, girl scout cookies, a whiteboard, dry-erase markers, and stick figures, in the video inside…
More bad news for Circuit City. Its stock is trading so low that it is in danger of being delisted from the New York Stock Exchange.
Aug. 5, 1931. I went to the fruit market house this evening. It was almost deserted. The farmers cannot sell their produce because men are not working and it has become fashionable for each family to have its own vegetable garden.
With the stock market so scary right now, investors are looking for a sure thing, especially those approaching or in retirement. Enter the equity index annuity, which promises you’ll never lose money but if the index it’s tracked to, like the S&P 500, gains, you’ll get some of that. Though your maximum upside is capped and you have to agree to keep your money in there for a fixed term or suffer stiff early-withdrawal penalties. Annuities are infamous for being extremely complicated and festooned with bizarre fees, but, that aside, NYT Your Money reporter Ron Lieber analyzed a typical equity index annuity and found it was a bad bet. Here’s how the numbers played out…
Monday’s brief hope of a better week for stocks was exactly that as the market continued its downward spiral through Friday and international indexes suffered body blows. [WSJ]
July 30, 1931. Magazines and newspapers are full of articles telling people to buy stocks, real estate etc. at present bargain prices. They say that times are sure to get better and that many big fortunes have been built this way. The trouble is that nobody has any money.
A lot of people and pundits have been blaming short-selling for the recent stock market plummets, and even the SEC temporary banned it at one point recently. But what is short selling? Marketplace’s Patty Hirsch is back with another video and his whiteboard to give you the low-down.
Dow ended the day by shooting up 936.42 points, 11%, ending at 9387.61, it’s largest one-day point gain in history. [Newsday]
WooHoo! I got a job! Right out of college and everything. With an awesome sign-on bonus! Now what am I supposed to do with all this money? I know I have options. Stock Market (HA!), bank, and under my pillow. I would put it in the bank but I have a wedding coming up in less then a year to pay for and I want to know my options for making good quick investments. Please help!
Stock markets finally rose with investors heartened by coordinated global intervention into the financial crisis and amid signs that the credit freeze was beginning to thaw a bit. [WSJ]
With the Dow currently below 8600, stocks are continuing their downward spiral this week, the but the WSJ tells us 3 ways why it’s totally different from 1929:
Just when you thought you were beginning to barely understand the financial cancer destroying America, it metastasized. Now it’s global.
If you feel at a loss for words to describe the now global financial cover, this spoof cover floating around the internet for September’s Economist says it all: “Oh fuck!” Download the large version, suitable for framing or desktop wallpaper, inside…
The Dow is down over 800 points, and the day isn’t even over. This beats last week’s all-time record of 777 points. A global credit crisis is in full swing, with versions of what just decimated Wall Street repeating itself across Europe as governments swoop in with bailouts of high-profile banks. Verily, blood is in the streets. Hm, what’s that old saw? Oh. Right. Buy when there’s blood in the streets.
The stock market is not doing well. The Dow Jones industrial average fell below 10,000 for the first time since 2004, and is currently down 440 points. [NYT]