That the Dow Jones Industrial Average and Standard & Poor's 500 kept falling Thursday, down to their lowest levels since when Britney Spears was svelte, is no longer news.
The news is simply that the bag of tricks upon which regulators, traders, and assorted smart money relied for so long is truly empty. The last hour of trading took investors further into the economic sinkhole as grim forecasts and plunging oil prices gripped Wall Street.
What didn't work was strong-arming on Capitol Hill as guerrilla bands from both parties tried to push through a federal bailout of the auto industry.
News that it was close to happening actually lifted the Dow to triple-digit gains early in the day, a flash that quickly became a memory as Democratic leadership put the brakes on.
What also didn't work was Prince Alwaleed bin Talal's grandstanding buy of
Citigroup shares. Long known as being among the smartest of the smart money, the Saudi billionaire can now join Warren Buffett, G.E. boss Jeff Immelt, and countless others who are bottom-feeding before Wall Street has found its bottom.
His Kingdom Holding Co. is down 63 percent this year, costing him $13 billion in paper losses, according to Bloomberg.
The prince stepped up today and increased his stake in the megabank from 4
percent to 5 percent—a buy that Bloomberg estimates cost nearly $350
million. Citi's shares closed at a 15-year low of $4.71, down 26
percent for the day.
History may absolve him, but on this day, the prince looked desperate, hoping his aura would pull Citi out of the doldrums more effectively than massive job cuts, draconian restructuring, and, likely, a few more heads rolling from corner offices.
The cosmetic moves and shows of bravado won't hide what's ailing the markets or the U.S. economy: growing fears of corporate bankruptcies and credit chill that don't show any signs of lifting.
From Portfolio.com: News and Markets
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