Headline: March was good, the quarter was bad, but it could have ended a lot worse.
The Dow ended the month up close to 8% but closed the quarter down 13%. Similar for the S&P. The Nasdaq faired much better with a plus 11% month, and only down 3.1% for the year. The strong performers globally were China, India and Brazil. The big news was really the strong move up from the lows in the month of March. 676 was the low close on the S & P on March 9th It went on to hit 797 at the end of the month and arrived at 835 today. An impressive bounce indeed. As I pour through my stack of papers I will add to this post some good month end summaries so we all have it to look back on.
There was a particularly good piece in the journal today that is worth reading called "From Bubble to Depression." It is a good study of the recent housing bubble and helps to explain why this crisis is of a particular variety - the too much leverage variety. "It appears that we're witnessing the second great consumer debt crash, the end of a massive consumption binge." This reminded me of something I wrote at the beginning of last year - my second oped ever...
"His ( Treasury Secretary Paulson's) advice to spend our way out of this temporary problem may well prove a ridiculous suggestion for an economy diseased from extreme over-consumption in part caused by a lack of appropriate financial oversight as well as overly stimulating monetary policy. Who ultimately will claim responsibility for America's addiction to buying stuff, made possible by cheap money and corner-store credit dealers? Though I am not quick to blame any one party, the first step in our collective healing process, as any AA member will tell you, is to admit you have a problem. " Judging by the country's new found interest in saving.... I guess the process of healing has begun.