Shop Talk

Welcome to new readers in Australia and New York,where I advertised this week.My newsreel colleagues and I work constantly to keep you well-informed,so you can make the best decision for your circumstances.Among those contributing matters of fact to my own research are The Associated Press,Bloomberg,The Washington Post,BBC and MarketWatch,as well as CNBC and The Wall Street Journal.None of us works in a vacuum,which is ultimately for your benefit.I am grateful to all of my fellow business editors and writers for their continual inspiration and assistance.As we approach the U.S. elections,we notice how many polls there are today.The number of national polls has gone from 55 in 2004 to 177 in 2008,but the only poll that counts is the one taken in the voting booth.That is the one that will influence our businesses and investments.

CalSTRS Is Buying

The second largest pension fund in the U.S.,the California State Teachers' Retirement System,or CalSTRS,is getting to the point of being shell-shocked,Chief Investment Officer Christopher Ailman revealed.Even so,we're actually investing.We put about one billion dollars into the market last week.These are bargains that you don't want to pass up.We're just stepping in.Wall Street is overreacting.I'm still worried about Europe.If we don't see the credit market continue to thaw,that would make me worry.Wall Street has already priced in a 30-40% earnings decline.You're still gonna have negative news,but you've got to digest through that.The circuit breakers are too wide,and the market has too much emotion.Wall Street is looking at the fourth quarter projections.I am confident in the American consumer getting through the financial crisis,Mr.Ailman affirmed.

The Hedge Fund Effect

Hedge funds serve wealthy individuals and institutions.It is believed they are responsible for about half the recent market declines.There had been 31 billion dollars in hedge fund redemptions as of last week.Typically these redemptions occur late in the day,when half of the recent market declines have occurred.There may be many more of these forced sales ahead.Indeed,up to a third of the 10,000 hedge funds may disappear altogether.Their investors want to cash out,so the fund managers must go on selling the funds' holdings,dragging the market down in the process.

A Determined Executive

Dow Chemical(DOW) has managed 388 consecutive quarters of no dividend cuts,Andrew Liveris said.This CEO will never cut the dividend,he swore.Our stock price is absolutely ludicrous.We're gonna remain strong.We've got tremendous financing arranged for our Rohm and Haas deal.We've got financial flexibility to do more this year,such as share buybacks.The stock price is divorced from the reality of the company,Mr.Liveris insisted.

Looking For Relief

Dow Chemical's portfolio is half commodities-based,half specialties,CEO Andrew Liveris explained.The commodities part has come down in price.There isn't one customer out there who isn't asking for cuts-even specialties customers.In some cases,even they are getting price cuts.Post-Olympics China has slowed down considerably,but local stimulus in China, such as infrastructure projects, will help.They're looking at 8-9% Gross Domestic Product.Frankly,I think the emerging world is gonna help us out of this crisis,Mr.Liveris conjectured.

Focus on Dow Chemical:Navigating the Crisis

Dow Chemical CEO Andrew Liveris said that hurricanes took out 80% of the firm's U.S. capacity,but now he can use different hydrocarbon feedstock because of demand destruction from the financial crisis.Price power is very poor.You have to manage costs,manage capital to keep yourself through this,keeping your long range plan in mind.Europe is in just as bad of a shape as the U.S.,Mr.Liveris observed.

Shop Talk

A special greeting to Virginia,where I advertised this week.Virginians are getting ready to vote.They won't let the media and the pollsters decide for them.There are many who have already declared victory,but maybe Virginia will surprise them.Some of my ancestors were Virginians,so I'm right at home with them.The stock futures threw a fit this morning,so I wasn't at ease then.In Japan,the Nikkei lost almost 10%.Things have settled down a bit,but we still have to get through the dreaded three o'clock hour.That's when all the forced selling comes in.Hopefully we can stay above the intraday low of October 10.So far,that has been a sturdy bottom for the market.