Indy Telecom & Industrial Media

A quick look at the VIX should send shivers up anyone’s spine.

Here’s what the VIX looks like, from the time it was created about 15 years ago.

And a look at VIX for the past 5 days, and the past month is even scarier. If you notice, there has been a significant jump or fall between the closing and opening index values for every single day.

The NYT has two excellent pieces on the current fiasco that’s been going on — What’s Worse Than a Flawed Bailout? and Revolt of the Nihilists.

Well worth reading.

The NYT has a good map that shows who voted for and against the bill.

I know where I’m moving to next…

With the way financial institutions have been going, it was only a matter of time before we went back to the roots of cooperative lending. Except that with a bit of technology, you add an element of modernization to the process.

And with that, I welcome you to P2P Lending.

Saddled by student loans and credit card debt, Ryan Little was looking for relief. Like many, the 30-year-old insurance agent turned towards banks for a loan but he ended up finding a much better deal elsewhere, on the Internet, through a website called Lending Club (lendingclub.com).

Little eventually borrowed 10,000 dollars from 30 people he didn’t know and had never met through Lending Club, a “peer-to-peer” or social lending network.

Websites like Lending Club and Prosper are doing just that, where they enable people to pick and choose who they lend to, and who they borrow from. The upside for the lender is that you have insight into why someone needs the money, and feel part of a good cause in helping someone in need. The upside for the borrower is that you get much lower interest rates, and you are accountable to not one person but to a community. The down side, of course, is the lack of any protections offered by a traditional banking system.

But given the credit crunch and the reluctance of banks and other financial institutions to lend money at low interest rates without guarantees, the market for such a service is definitely understandable.

Back to the basics, it would seem.

How long until DJIA goes below the 10,000 mark?

After hours trading is killing the market. I predict that immaterial of what happens, within the next few days, a few regional banks will either go down or get bought.

My eye is on National City and Fifth Third. Let us see.

Update: Turns out that I am not alone, not after a 52% fall.

…and we live in interesting times.

The markets are scary to watch right now.

If this bill does not go through, the harm done to the markets may take a long, long time to recover.  I once made a wager with a friend that the Dow will almost certainly not hit 4 digits.

Now, I’m not so sure.

Goldman Sachs and Morgan Stanley have asked for and been approved the bid to become banks, marking the end of the investment banking era on Wall Street.

The more interesting part is that in the past couple of months, every weekend has been mired with some eventful occurrence or the other, on Wall Street. That said, this is indeed a sad day when all the major i-banks have either gone under, been bought out by bigger, regular commercial banks or have elected to become commercial banks.

Goldman, the largest and most profitable of the U.S. securities firms, will become the fourth-largest bank holding company. The firm already has more than $20 billion in customer deposits in two subsidiaries and is creating a new one, GS Bank USA, that will have more than $150 billion of assets, making it one of the 10 largest banks in the U.S., the firm said in a statement last night. The firm will increase its deposit base “through acquisitions and organically,” Goldman said in a statement last night.

The change is also likely to lead to less risk-taking by the companies and possibly lower pay for their employees. Both Goldman and Morgan Stanley held more than $20 of assets for every $1 of shareholder equity, making them dependent on market funding to operate.

While I am not sure if that is entirely a good thing, market sentiment is what market sentiment is. Either way, Wall Street won’t quite be the same again.

My tailor has a quote that says something along the lines of dressing for the job you want, unless you are an investment banker – I guess that wouldn’t be holding true for much longer.

Quote of the week, by Akshay:

 ”…and while we’ve been out, intimate, with our respective petites amies, Merril Lynch and Lehman Brothers have collapsed.”