‘We are not quite at the panic stage yet, but this is beyond jitters.’
— Martin Slaney, GFT Global
A wild day on Wall Street today as the fallout from the artificially-propped up mortgage market continues to unwind. And it’s not pretty.
According to MarketWatch, “Black Mesa Capital, a hedge fund firm that uses computer models to track down investment ideas, has told investors that at least one very large hedge fund or investment bank is liquidating “massive” trading portfolios, according to a letter the Santa Fe, NM-based firm sent to investors on Wednesday.That’s causing disruptions and triggering big losses among other so-called market-neutral hedge funds, Black Mesa said in its letter, a copy of which was obtained by MarketWatch on Thursday.”Clearly, something is amiss in the markets that few in our strategy, if anyone, have experienced before,” Black Mesa’s managers Dave DeMers and Jonathan Spring wrote. DeMers declined to comment on Thursday.”
Oh, let me go back and find those comments from economists and other industry analysts from just a few months ago — saying that the “housing mortgage problem was nothing to worry about.”
Right. Yep. Sure. Okay.
This news comes after BNP Paribas, one of the largest banks in France, said this morning that it will stop valuing three of its funds and is suspending investor withdrawals after U.S. subprime-mortgage woes led to the “complete evaporation of liquidity.”
Don’t you just love Wall Street “speak?” The “complete evaporation of liquidity.”
That one deserves a gold star.
Anyway, yep, it’s a tense market out there today. At last look, the DJIA is down more than 300 points. Let’s see what the last hour brings.
Oh — and the price of oil? Closed at $71.50 today.
Airline stocks? A sea of red numbers, for the exception of AirTran, JetBlue, and Alaska Air Group.
Tickers: (NYSE:AAI), (Nasdaq:JBLU), (NYSE:ALK)
Technorati Tags: airline stocks, AirTran, Alaska Airlines, BNP Paribas, hedge funds, jetBlue, wall street