The market is down a big 160. The SFE Futures suggested a 157 point fall in the market this morning.

The Dow Jones was down a huge 387 – It moved in big 387 point range and finished 3% lower, suffering its second biggest one day fall this year on concerns about the subprime mortgage. France’s biggest bank, BNP Paribas announced they were freezing three funds that invested in US subprime mortgages. You should also know that the CEO of BNP Paribas said last week that their exposure to the subprime mortgage market was “absolutely negligible”. It just highlights the uncertainty (who has got an exposure and where) and it’s the uncertainty that will kill the market and the market in hedge funds in particular.

Tonight: It’s not looking good for tonight. The Dow Futures are well down and there is this is a less than encouraging comment from the 2nd largest mortgage lender in the US Countrywide Financial – “The secondary market and funding liquidity situation is rapidly evolving, and the potential impact on the company is unknown…..These conditions may continue or worsen in the future”.

The news today (does anyone care):

  • The US bond markets are now pricing in a 100% chance of a US rate cut at the next FOMC meeting on September 18th.
  • In the morning meting we usually go round asking from contributions from a variety of departments, the trading desk, the institutional desk, the fundamental research department. We realised the only department we needed this morning and the only department we haven’t established yet was the Psychology Department.
  • There are a lot of complaints about how much Sol Trujillo is getting paid. His pay packet has gone up 10 times more than the Telstra profit. But as one colleague cynically quipped this morning….imagine how much he’d get paid if he’d done a good job. (Truth is…it would be a lot worse without him).
  • The Stockbroker’s cliché index hit its highest level since September 11th 2001 this morning.
  • There is talk of the Yen Carry Trade unwinding again after the recent spike in the Yen. That old Apocalypse. Here is a chart of the Yen against the US$. You can see what they are going on about. The Yen is spiking.
  • Westfield (WDC) has announced two transactions. WDC down 43c to 1922c.
  • There is a heap of broker research out this morning regarding Telstra (TLS) and their results yesterday. The stock is down 10c to 442c. Most brokers maintained their previous recommendations, Goldman Sachs JB Were cut their recommendation to SELL from HOLD saying their guidance was “uninspiring”.
  • Macquarie Bank say News Corp. (NWS) is one of the cheapest stocks on the market.

One of the stockbroker’s main roles in life is as a hand holder. People need reassurance and direction in this sort of market. That’s why they are on the phone to a broker today, not because they have a hot tip but because they need clarity and direction. The worst response in this market is for the broker to not know what to do. All brokers need a clear message today. Right or wrong.

My patronising hand holding comments are in the Marcus Today stockmarket newsletter today along with an explanation of what happened last night, the hangover in hedge funds and an explanation of what the credit crunch really is, why it happened and what to do now.

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