Blog Posts by Henry Blodget

In the wake of the terrible and sad news that Steve Jobs has resigned as CEO, Apple's stock is down 1.7%. This is actually barely any drop at all.

And that suggests two things:

First, that the market was expecting this news (and was obviously wise to be expecting it, given Steve's medical leave and health condition).

Second, the market thinks Apple will do just fine without Steve. And I think the market's right about the latter, at least over the next couple of years.

Steve Jobs' contribution to Apple cannot be overstated. Steve singlehandedly resurrected the company after it had been run into the ground by idiots and then left for dead. In about 15 short years, Steve led Apple from tech-industry roadkill to the most valuable company in the world.

Under Steve's leadership, Apple has produced products that are as beautiful and revolutionary as they are coveted and beloved. It is likely that the world will never again witness such an amazing and inspiring performance by a founder and

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The revolution in Libya and other events have focused attention away from the sovereign debt situation in Europe, but it's still dire.

Gillian Tett, managing editor of the Financial Times, confirms that European politicians don't have the guts to make the tough choices necessary to resolve the problems and are instead just kicking the can down the road.

There are only two ways the situation can be permanently fixed, Tett says:

Either European countries come even closer together and operate as a fiscal unit in which rich countries like Germany pay the bills of poorer countries like Greece, or the Euro-zone just splits apart.

The former solution--fiscal unity--is preferable, Tett says, but it's also politically challenging. German citizens are understandably outraged at the idea that their taxes would have to pay for other country's spending, and Germany's borrowing costs would almost certainly rise.

The latter solution--a break-up of the

It's deja vu all over again.

The stock of a humongous American bank, Bank of America (BAC), is collapsing.

This is stoking fears that Bank of America will go bust, taking the whole economy down with it.

Why is Bank of America's stock tanking?

Because the market thinks Bank of America is worth much less than Bank of America's management says it is.

In fact, in what is fast becoming a formal law of bank-stock thermo-dynamics, the more the bank insists that everything's fine, the more investors take this as a signal to run for the hills.

Meanwhile, the more the bank's stock drops, the more expensive and painful it will be for it to raise cash if and when it finally admits that the market was right all along (the next formal law of bank stock thermo-dynamics being that the market is generally right.)

And given that Bank of America has now persuasively broken the $7 barrier and now has a mere $65 billion of equity value left, this death spiral can't continue much longer. (The good news, I

Provided by Business Insider

A former senior analyst at Moody's has gone public with his story of how one of the country's most important rating agencies is corrupted to the core.

The analyst, William J. Harrington, was employed by Moody's for 11 years, from 1999 until his resignation in 2010.

From 2006 to 2010, Harrington was a Senior Vice President in the derivative products group, which was responsible for producing many of the disastrous ratings Moody's issued during the housing bubble.

Harrington has made his story public in the form of a 78-page "comment" to the SEC's proposed rules about rating agency reform, which he submitted to the agency on August 8th. The comment is a scathing indictment of Moody's processes, conflicts of interests, and management, and it will likely make Harrington a star witness at any future litigation or hearings on this topic.

The primary conflict of interest at Moody's is well known: The company is paid by the same "issuers" (banks and companies)

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For the past two years, the world has been watching as Europe's financial situation continues to deteriorate.

From the beginning, this has been a slow-motion train wreck. And our guest Josh Rosner, managing director at Graham Fisher & Co., says we're getting closer to the crash.

The fundamental problem in Europe, Rosner says, is a "solvency crisis," not a "liquidity crisis." In other words, countries like Greece, Ireland, and Portugal simply can't afford to pay back their debts. And no amount of short-term funding or budget austerity will ever fix that.

The only way out, Rosner says, is a restructuring of these sovereign debts, a write-down of their value by the banks that own them, and a re-capitalization of th banks by their sovereign governments. But the level of coordination required to make that happen smoothly will be extraordinarily challenging to pull off.

Thus, Rosner thinks Europe's train wreck is headed for an eventual crisis.

On

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The most respected investor and capitalist on the planet, Warren Buffett, took to the pages of the New York Times this morning to bust a myth that has dominated political discourse in recent months:

The idea that raising taxes on super-rich people would hurt the economy.

Buffett observes that his own personal taxes as a percent of his income have plummeted in the past decade, to all-time lows. He observes, as he has before, that he pays a much lower tax rate than his secretary. He calls out the absurdity of hedge-fund managers and other professional investors playing "long-term capital gains" rates on short-term trading profits.

And then he takes aim at the biggest rationale for preserving these astonishing tax breaks: The claim that, if taxes on deca-millionaire and billionaires were increased, these super-rich Americans would stop investing, thus clobbering the economy and hurting job growth:

Back in the 1980s and 1990s, tax rates for the

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The past seven trading sessions have been nothing short of remarkable.

Last Thursday, after a couple of weeks of steady but relatively normal declines, the Dow suddenly tanked 500 points. Then, after a modest recovery on Friday, it fell 600 points. Then it soared 400 points. Then it plunged 500 points. Then it blasted off to another 400 point gain. And, today, after another 100+ point gain, it appears poised to end the week down, but within a couple of hundred points from where it started the week.

What gives?

Is this wild volatility the start of another massive market crash, along the lines of what happened in 2007-2009, or 2000-2002? Or was it just a "correction" -- sharp and scary, but now over and done?

No one knows, but Aaron and I think the risks are still to the downside.

The market's initial plunge was triggered by the European solvency crisis and the US debt downgrade. The shock of both has worn off, but the fundamental problems have

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Wall Street's wildest week since 2008 continued with another 400-plus point move for the Dow on Thursday. The Dow Jones industrial rose as much as 549 points, or 5.1%, before closing the day up 423 points or 4%. The S&P 500 and Nasdaq both gained more than 4.6%.

Is the worst over?

With the market yo-yoing wildly, investors and pundits have become obsessed with "calling the bottom"--trying to find the exact moment when the last panicked seller flees and the market soars.

With a 500-point drop last week and 500- and 600-point drops this week, as well as a 400-point up day in between, trying to pick the exact bottom is tempting.

But it's a fool's exercise, says Barry Ritholtz, the chief investment strategist at FusionIQ and the writer of economics blog The Big Picture.

Ritholtz doesn't think we've hit bottom yet, but he has begun "scaling in"--moving money into the market gradually, in tranches.

Ritholtz actually regards the obsession with trying