Today's Market Close

(CTML)

Today seemed to be a steady descent. I was trying to find a graphical pictorial of Dante's Seven Circles of Hell. I'm not sure which circle we are in, but I was surprised when I did my search that I actually found a reference to my blog. No picture, though. You can view that entry here. In fact, you might find it interesting to read it after what happened today.

Yesterday I bought some FCL, XLE and WLT (MAR 30) puts. I closed the first two out today for a reasonable gain. I'm still holding WLT. I figure with building, mortgages and coal they will be a double whammy. It dropped 8.38% today, and my puts gained more than 62%.

Today MER noted that they took a writedown on their credit protection. I believe that I floated that concept some time ago--specifically commenting that I found it odd that no one was talking about the effect of eroding financial power of the entities that were issuing credit protection in all of its odd forms--I think that credit protection mutated like a virus and infected all portfolios.

I'm still concerned about the insurers. Remember that they have to invest money in order to make payouts etc. on annuity products and the like. Well, they were greedy for yield, and they bought lots of this "stuff".

Here's a chart on HIG:

Here's AXA:

Here is AIG

There are other similarly maligned insurance stocks. Here's the population of stocks:

I'd like to write more, but it is time for me to get dinner on the table. I will turn in early tonight. It was snowing this a.m. And it is cold. We thought it a good idea to keep a fire going. Rather than use some of the wood that was close, I thought that I'd get some exercise (part of my resolutions). Accordingly, elected to go fetch some wood (with a cart of course) by our shed. I fetched two loads and stacked it inside. But there is a steady grade from the woodpile to the back door where I unload. It took its toll on this body.

I hope that you are keeping your wits about you in this market.