Michael Gracie

1) Buy and hold as an investment strategy - dead. The bigger question is whether people will still use Warren Buffett as an analogy for success of the concept (for better or worse), or whether people will trade their asses off from here on out and say “works for John Paulson.”

2) Google - dead. Not sure whether it’s just because Goldman Sachs said it and they’re still standing (unlike most of their peers), or whether the old adage “the bigger they are the harder they fall” is just sticking better than usual nowadays.

3) Wall Street bonuses - dead. I don’t think they should die (and I’ll have more on that later), but perception is reality and the perception of the taxpaying public is enough is enough.

Neither tidbits, nor juicy

• Author Michael Lewis speaks to the end of Wall Street, only this time it really seems like the end. If you want the inside scoop on how the credit debacle came to be, read the whole thing - it’s a doosie, but worth the coffee break. (h/t Paul Kedrosky)
• “A Suburb Can Survive” - trading up to bigger and bigger homes, showcasing the “American Dream”, might have turned out ugly, but since you have a big yard and juvenile trees, you can still put up unobstructed solar panels and windmills, and plant yourself a garden. You can’t say that about condo dwellers, which is why I’d bet that as fuel prices gyrate, urban renewal is going to hit a brick wall.
• Virtual-machine enabler for Mac, Parallels Desktop, just got a speed boost. As a licensed Parallels user, I’m not sure I need to upgrade - the latest OS X is offers plenty for development and database analysis, and I’ve been able to shuck some software I was still hanging onto from the Windows days. In other words, I don’t need Windows or Linux as much as I use to. Nevertheless, it’s half off time for those who do have a need for speed, but you have to act fast.

And last but not least…

• Oh where, oh where has our $2 trillion gone, oh where, oh where can it be?

Adieu.

In the world according to Bill Gross.

The premise is that the bailout is good for everyone - that may be true, otherwise you may wind up paying ten bucks for a gallon of gas. But the idea that the Treasury is going to buy assets at 65 cents on the dollar (that private parties are bidding 15 cents for), and squeeze a profit out of it, is disingenuous at best.

At worst, perusal of the comments on the WaPo op-ed would make you think the recent Pew poll that suggested 57% of the public favored a bailout is in need of a serious resampling.

MORE: A key point of the profit analysis is the “hold-to-maturity” price (Bill Gross’s “lengthy ownership of the assets”), while Warren Buffett says the Treasury should pay market price if they expect to stay in the green.  The banks won’t be liking that.

After a chaotic weekend, Lehman filed for bankruptcy and Merrill sold itself to Bank of America. The Dow Jones Industrial Average plunged 504 points on the news (and roughly 20% of that loss occurred in the last hour or so of trading). It will forever be referred to here as “Brown Monday”. And the news is still coming.

Today we find…

• Russia’s market sold off 17% overnight and trading had to be halted - BRICs are doing nothing but crumbling;
• The US Treasury seriously considering conservatorship for AIG - no doubt the idea of losing both the massive credit risk hedges AND a good portion of the P&C market is playing a role here;

and…

• Wilbur Ross says get ready for 1,000 banks to fail - kind of scary even if he is half right.

Adieu.

UPDATE: Almost forgot…folks are wondering whether Blackberry subscriptions will take a hit now that Wall Street has been bludgeoned. Maybe those Blackberry addicts will go back to loving their spouses?

Eweek recently presented an article entitled Boggled by Google: Wall Street Way Off Mark. I say forget the analysts, and good for Google. Keep’em guessing boys, while you continue to beat the pants off even your own internal estimates. The game that is generally played between analysts and the companies they follow is getting turned on its head here. Google has a complex business model; one that a white-shoed analyst with a fresh Harvard MBA is going to have tough time picking apart (that is, unless he or she also has a PhD in mathematics from MIT).
Read more »