Bloomberg reports:

Companies cut their short-term borrowing for the sixth straight week, for a total contraction of $366 billion to $1.45 trillion, the Fed said Oct. 23, as investors balked at taking on the debt. The market is down 35 percent from its peak of $2.22 trillion in August 2007.

Apparently two thirds or that contraction is in the last 6 weeks. I’m not specialist on monetary policy, and I realize that some of that borrowing was done elsewhere. But, some of it, certainly in the last six weeks certainly was not. If companies are borrowing, say, 10% less than they were a year ago, doesn’t that mean we’ve had at least a 10% contraction in GDP?

We had an awesome time at Citrine and the Highline Friday night.

“In the week ending Oct. 18, the advance figure for seasonally adjusted initial claims was 478,000, an increase of 15,000 from the previous week’s revised figure of 463,000. It is estimated that the effects of Hurricane Ike in Texas added approximately 12,000 claims to the total. The 4-week moving average was 480,250, a decrease of 4,500 from the previous week’s revised average of 484,750.”

Yesterday Adbrite, one of the smartest dotcoms around, laid off 40% of its staff, including two honchos, in an effort to become cashflow positive in anticipation of the coming advertising ice age. As Techcrunch noted

The irony of Adbrite making cuts isn’t lost on us. The company was originally spun off from FuckedCompany.com in 2003 by founder Philip Kaplan. FuckedCompany, of course, brutally chronicled the layoffs and liquidations that marked the end of the 2000 Internet bubble (and was the subject of our 2007 April Fools prank, which was much funnier in the middle of a bull market). If the site were still live today, Kaplan would be writing about this there.

Meanwhile, Clickz has started a “red ink calculator” and here’s a layoff tracker from Techcrunch. And let’s not forget the deadpool.

Google’s CEO Eric Schmidt said yesterday, “All of us are vulnerable. It’s a race between a contraction in advertising, which would affect everybody, and a very positive shift from offline to online.”

Blogads is not immune to an ice age, and we’re looking for notches on our belt to tighten. Meanwhile, we’re pleased to be cash flow positive and profitable since 2004 and the low cost operator in our space serving bloggers who are themselves the low cost operators in the media marketplace.

Update: Meanwhile, a reader writes in to point out that VCs are turning the screws on unprofitable long-shot companies they’ve invested in.

Laura Collins’ profile of Arianna Huffington in the New Yorker included this wonderful oxymoron: “The site has been a triumph. Since the launch, Huffington and Lerer have raised eleven million dollars.”

In people-speak, “raising eleven million dollars” means “spending” eleven million dollars more than you’ve made.

Warren Buffett warns against market-timing:

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Elsewhere, he notes that his investment fund Berkshire Hathaway is not 100% in stocks… why?

Google’s 26% earnings growth in Q3 versus last year seems to have cheered investors, sending the shares up 10% (to $390) in after-hours trading.

Seems like very old news to trade on, since the economy went into a tailspend 90% of the way through the quarter.

and

A pleasant surprise for the economy, last week’s claims didn’t balloon.

In the week ending Oct. 11, the advance figure for seasonally adjusted initial claims was 461,000, a decrease of 16,000 from the previous week’s revised figure of 477,000. It is estimated that the effects of Hurricane Ike in Texas added approximately 12,000 claims to the total. The 4-week moving average was 483,250, an increase of 750 from the previous week’s unrevised average of 482,500.

While the short-term thrill of a gusher of cash is understandable, investors have to be fundamentally concerned at the nationalization — apparently forced in some cases — of some of the linchpin institutions of America’s economy. There are a couple myths to be dispelled:

* “This is not costing shareholders’ money, because the government is just getting a preference share and shareholders aren’t being diluted.” Shareholders’ voting rights may not be diluted, but they are getting less of the banks’ profits than they expected.

* “This happened in prior bailouts.” In fact, the FDIC has in the past been scrupulous about obtaining shareholder approvals for partial nationalizations. Here’s Irvine Sprague, chair of the FDIC at the time, on the government’s takeover of First Pennsylvania in 1980:although it may not have been legally required… the only fair thing to do was to give the shareholders a vote on the plan. They were going to take the hit if we put the plan into effect. Beyond fairness we … knew that full public disclosure and a shareholders’ vote was the best eefense against any possible lawsuit.”Meanwhile, two of the banks that did not need the government’s help are trading up. Wells Fargo is up 7.5% at $32.7 and JPMorgan is… ahh JPM is actually down 3% at $40.6. Guess JPM’s shareholders are smarter.