It is said that once the mainstream media catches on to a financial crisis, the peak of the crisis is over. In other words, once the mainstream media has said ‘STOCK PANIC,’ that’s when you buy stocks.

It’s difficult to say when the mainstream media has or has not done something. But one thing is for sure, once negative economic news starts making its way into fast food and car commercials, you know it has hit.

The clearest example of this was Chrysler’s $2.99 gas guarantee this past summer. Remember that? Instead of getting a standard MSRP discount, suckers who took this deal were guaranteed $2.99 gas for life. Well, if they just waited a few months, the standard price at the pump would be less than half anyways. People who bought this deal were essentially hedging against rising fuel costs (so basically buying oil) back when oil at its peak of $140 a gallon. Bad bet.

Now, we have a few commercials talking about the recession. My favorite is Hyundai’s Assurance Program, which basically says that if you get laid off, you can return the car at the price you paid for it. Hyundai’s basically betting against unemployment rising that much. People who take Hyundai up on this are hedging against themselves losing their job (basically buying that unemployment will go up a lot). Sounds eerily similar to Chryler’s $2.99 gas guarantee doesn’t it?

Then there’s Jack In The Box’s commercial that talks about the recession. This isn’t making any guarantees or anything like Hyundai, but it does highlight that the recession is front and center in the mainstream media.

The stock market plummeted yesterday and then rocketed back today. Financial stocks, in particular, led the charge both days. Financial shares dropped 10-20% yesterday, only to see 10-30% gains today.

Talks of need for more government money and bailouts is what rocked the financial shares. Many were worried the banks were in even more worse shape than people thought and that the government would end up wiping out common stock shareholders ala AIG/Fannie Mae type bailouts. This would particularly be the case for Citigroup and perhaps Bank Of America.

Today, as these fears subsided, shares came back. Then, on news of insider buying, such as Jamie Dimon’s 500k shares of common stock purchase of JP Morgan, financials came roaring back.

It seems like financials, particularly BOA and Citigroup are at the tipping point. Citigroup is at $3.67 a share, even after today’s surge. This is down from $50 a share from just a few years ago. It’s hard to see Citigroup staying below $5 a share for an extended period of time. Either this stock will come roaring back or common stock shareholders will be wiped out. I don’t see it stagnating between $3-$6 for long.

Ever since Yahoo stupidly spurned the $42 billion takeover bid by Microsoft, the company has been in a freefall. Shareholders have demanded Jerry Yang’s head, the former CEO and founder of the company. Since he has stepped down, Yahoo has been looking for a new CEO.

Who did they come up? A 60 year-old woman who is a former CEO of a software company. No experience in internet advertising or search. Somehow, I doubt this is the answer to Yahoo’s problems.

One of the areas I thought yahoo had a chance was with their Yahoo Publisher Network. While fewer people may use their search engine, webmasters may be enticed to use that ad service if they gave a better revenue share/customer service than Adsense and other alternatives. Yahoo seems to be incompetntly running that service though. No new applications have been taken and the service has been in beta for over 3 years now.

When the prospects of a recession first came about, some speculated that the casino sector may be insulated, thinking gambling was a recession-proof business. Their reasoning was that either gambling was addictive so people did it no matter what or people would try to ‘win back’ their portfolio and other losses at the dice table. Boy were they wrong. Vegas has seen a huge drop in wagers; gambling was the first thing consumers cut out of their spending. Stocks like MGM Mirage and Las Vegas Sands (who owns the Venetian) are down close to 90% from their highs.

I recently went to Vegas and saw this first hand. I gamble quite a bit and will play for high stakes at the casino. The first thing I noticed when going to Vegas was that the room rates were down considerably. At the Wynn and the Venetian, where a Saturday night stay was often sold out or room rates were $400-$800, a Sat night stay over New Years could be had for $160. Needless to say, if you haven’t been to Vegas and were thinking about going, room rates now are better than ever. You can stay at the Wynn for the same price it used to cost to stay at the Flamingo.

One thing I wondered about is if the casinos changed their comping policies. It’s difficult to tell. For example, how much easier would it now be to get your room comped than in the past? If you think about it, it should be considerably cheaper since the room is now worth less. Comping a $170 a night room means a lot less than comping a $400 a night room in the sense the casino is losing out on less revenue.

On my recent stay, I initially stayed at the Venetian. They sent me out a mailer offering me a free hotel room over New Years, so I went ahead and took them up on it. Three nights into it and down about $3500 with an average bet of well over $500 and 5 hours of play at the craps table, I asked if they could extend my stay a few more nights. Also, I might add, I was very annoyed with the casino’s taxi valet. It’s a long story, but I was shocked at how rude casino employees could be, given at least in the Venetian’s case, the company is on the brink of bankruptcy and the last thing they should do is offend any customers.

At this point, the casino host was pretty curt with me and acted like my play wasn’t  that much in of itself to guarantee a few more free nights and that he couldn’t do anything about the rude taxi valet. I was pretty shocked they wouldn’t bend over backwards to keep me there, since there weren’t that many people gambling ofr high stakes. The casino was fairly empty, so they risked losing a valuable customer (I go to Vegas 3-4 times a year) to keep a room for a few nights.

I told the casino host peace and went to the Wynn. With less play and a less loss, they happily comped my two nights there. At least the Wynn gets it.