Staggering Losses of Capital

If you want revelations, go over the largest-cap companies right now vs. the ones that were the largest-cap last year at this time. The stocks, the losses, the changes, they are staggering.

First, the aggregate: The largest 100 companies a year ago were worth $8 trillion; they're now worth $5 trillion. That's a lot of missing trillions. In the day-to-day drudgery and decline, they seem largely unaccounted for until you look at each line item.

You lose that much capital in bizarre ways. Consider last year's top five capitalization stocks. ExxonMobil (XOM), a stock everyone says is the most stable in the world, goes from $459 billion to $357 billion. Microsoft (MSFT) -- like Exxon, a company with a fabulous recurring earnings stream -- goes from $264 billion to $160 billion. Dependable AT&T (T) sheds about $90 billion from $228 billion to $135 billion. Procter & Gamble (PG), which everyone thinks of as having a bad year, dropped about $50 billon from $204 billion to $150 billion.

But then there's General Electric (GE). It stood at $347 billion last year this week. It is now barely about $100 billion. Terrible, but not when you consider the other financials -- and there is no doubt with that loss that anyone is thinking GE is anything but a financial. Take Bank of America (BAC), which has gone from $197 billion to $24 billion, Citigroup (C), which has retreated to $13 billion from $125 billion, and the colossal disappearing act of AIG (AIG), going from $116 billion to $7 billion.

The declines are so staggering that you find yourself thinking only one thing: How could we have ever trusted these pieces of paper with our nest eggs? Plus, the "terminal" value of some of these stocks, such as BAC, C, AIG, is catastrophic. They aren't coming back.

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