Ron Insana hitting prime time....again...CNBC..is bringing them all out...
somebody spoke well of my Speedy???????? boy ..he sure doesnt know Fred like I do !!!!
Clinton, Nixon and the market
By Richard Melville
NEW YORK, Sept 10 (Reuters) - Wall Street hates a power vacuum, particularly at times
of international turmoil, which is why markets are reeling along with President William
Jefferson Clinton.
Ironically, the erosion of Clinton's power comes just two years after Wall Street rejoiced over a government divided between a
Democrat in the White House and a Republican-led Senate. But for investors, the bliss of gridlock in government is not to be
mistaken for the perils of a leadership void.
''There are times when leadership is extremely important and this is one more example of how a power vacuum in political
leadership can be very problematic,'' said Hugh Johnson, chief investment officer at First Albany.
The unraveling of Clinton's hold on the leadership of the United States comes at a time when the economies of the world are so
intertwined that even political problems are quickly exported. Markets in Brazil and Argentina, for example, slid in tandem with
Wall Street and suffered double-digit declines on Thursday.
The crisis has also raised repeated comparisons to the demise of the presidency of Richard Nixon, the only U.S. president in
history to resign the office.
To be sure, Clinton's and Nixon's situations differ considerably. The congressional investigation of the Nixon administration's
involvement in several crimes, including the the break-in at the Watergate hotel, came at a time of intense economic strife.
Then, the United States was contending with inflation, an oil embargo by Arab nations after the outbreak of war between Israel
and Egypt and Syria, the extended and unpopular U.S. war in Vietnam and the Cold War with the Soviet Union.
Today, the U.S. economy is growing, inflation is not a threat, nor is world war. Markets are also able to turn to Federal
Reserve Chairman Alan Greenspan and U.S. Treasury Secretary Robert Rubin for some solace in times of anxiety. But as First
Albany's Johnson notes, sometimes even that is not enough.
''Both Rubin and Greenspan are extremely capable,'' he said. ''But when there isn't any sort of real political endorsement
available, the impact is not the same.''
As an example, Johnson noted how delivery of independent counsel Kenneth Starr's report on his investigation of Clinton has
wiped topics of market concern -- such as funding for the International Monetary Fund -- out of view.
The wrenching period has some on Wall Street hoping out loud for a quick resolution to the political drama, whatever the
outcome. Others disagree, pointing directly to Nixon as a sobering precedent.
''The key thing is that after Nixon resigned, the market went down even more,'' said Robert Stovall, president of
Stovall/Twenty-First Advisers.
While Nixon's resignation in August, 1974, came well into a bear market that began early in 1973, it provided the trigger that
sent the Dow Jones industrial average into ''the final death throes'' of its downward spiral, according to Yale Hirsch, market
historian and editor of the Stock Traders' Almanac.
The Dow closed at 777.30 on August 9, 1974, the date of the resignation, fell 13 percent to 678.58 by the end of August, lost
another 10 percent in September to 607.87 and only bottomed on a closing basis at 584.56 on October 4, a 25 percent slide.
For all the concern, there are some bright spots, at least when comparing the current scenario with the Nixon era.
Budget deficits, fueled by an arms race, are apparently a thing of the past, even given Russia's recent turmoil. Also, while Vice
President Al Gore has been the subject of some scrutiny, his troubles pale next to those of Nixon's Spiro Agnew, who resigned
the vice presidency in 1973, to be replaced by then-Representative Gerald Ford.
As Stovall notes, ''There is a feeling now that buying stocks is the way to go in building for the future. That wasn't the case
back then.''
Nevertheless, the correlation between presidential scandals and weakness in the stock market is a strong one.
Hirsch pointed to the bear market under Nixon as the worst case thus far, but noted several other scandals that at least
coincided with sharp market declines.
The scandal-plagued administration of Ulysses Grant oversaw a more than 20 percent stock market decline in 1876 and stocks
fell nearly 13 percent in 1924 as the Teapot Dome scandal inherited by Calvin Coolidge rippled through Washington.
The market crash of October 1987 was the most dramatic phase of a 36 percent decline that coincided with the Iran-Contra
scandal faced by Ronald Reagan's administration.
After closing at 7,615.54 on Thursday, the Dow is 18.4 percent off its last all-time record high of 9,337.97, set on July 17.
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U.S. OPTIONS/VIX soars, rumors lift 3Com, others
CHICAGO, Sept 10 (Reuters) - Implied volatility on stock index and most equity options
surged on Thursday as the market suffered another big spill, but a handful of stock options
saw their volatility levels sprint ahead amid takeover rumors, traders said.
Among them were 3Com Corp. (Nasdaq:COMS - news) and Ascend Communications
(Nasdaq:ASND - news), which were rumored to be possible targets of Intel Corp.
(Nasdaq:INTC - news).
Separately, Bergen Brunswig (NYSE:BBC - news), Comsat Corp. (NYSE:CQ - news) and PSS World Medical Inc.
(Nasdaq:PSSI - news) were also at the center of takeover speculation.
''Vols are up in all of those (stock options), but it's really tough to measure now because there's a lot of anxiety about the
whole market,'' said Paul Foster, investment strategist and editor of 1010WallStreet.com.
The Market Volatility Index , which measures implied volatility of several strikes on S&P 100 options and is a good gauge of
fear in the market, spiked up 8.37 points to 47.36, just off the August 31 closing high at 48.33.
The OEX stumbled 13.66 points to 478.82, erasing almost all of what it gained on Tuesday.
Worries about President Bill Clinton's political fate, on top of turmoil in emerging markets and the impact of depressed world
economies on U.S. corporate earnings, are likely to keep the market under pressure for the foreseeable future, traders said.
Investors were looking to Friday when the House of Representatives was expected to release large parts of U.S. special
prosecutor Kenneth Starr's report on the Internet.
''This is terrifying,'' said Jay Shartsis, director of options trading at R.F. Lafferty & Co. ''The rest of the world looks to the
U.S. for stability and we're facing the possibility of an impeachment.''
He said heavy index put buying and the fact that the stock market comfortably held above the September 1 ''panic lows''
suggested that selling may have been exhausted for now.
OEX put volume broadly outpaced call volume 92,404 to 65,739 on the Chicago Board Options Exchange.
Elsewhere, traders said implied volatility on September at-the-money options on 3Com and Ascend climbed as high as 90
percent and 85 percent, respectively.
Volatility on nearby options on Bergen advanced to about 67 percent, while volatility on options on Comsat and PSS rose to
roughly 170 percent and 115 percent, they said.
Comsat, Ascend and Intel declined to comment on the rumors, citing company policy.
A spokesman for PSS World said he was aware of the rumor and noted there had been a report by a sell side analyst
mentioning the rumor, but declined to comment.
No one was immediately available to comment at 3Com and
Bergen.
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