Strange things brewing in the market today. In breaking news, the SEC has charged Goldman Sachs with fraud on subprime loans. John Paulson (Paulson and Co.) seems to have been in the mix as well, selecting specific subprime securities and then shorting (betting against the security) with CDO’s through credit default swaps. It’s complicated and not a good situation for Paulson and Goldman. By the way, their stock is off $23.00 while the Dow is off over $100.00.
Earlier today, March Housing starts rose 1.6% but with a twist as single family starts fell .9% and multi-family jumped 39.7%. Permits rose 7.5%. Michigan Sentiment Survey was the headliner of the day, falling 4.1 points to 69.5. The market was looking for an improvement to 75.0. The rub is that while consumers think the overall economy is improving, they still hold negative views on jobs and income.
In news across the pond, the PIGS (Portugal Ireland Greece Spain) have another looking to join the party. Seems that Hungary has issues and is facing a high probability of currency sell-off risk. This will support fixed income products in our market.
Market reaction to all of the above, especially Goldman, has seen strong two way trades and volatile market movement. Treasuries are all over the place but currently in rally mode. Speaking of stocks, the big board is now down 130 something with only sell orders seen in the pit.
Wild and wicked Friday. More in a few.
