Dow Closes Up 400 points. Fundamentals win. Barack Loses.

[Wretched Excess]

@%#*&^{*!!!!!!!1!11!  could we please be doomed for two days in a row?  haven't these people
heard that it's the great depression?  how is it going to look if we aren't doomed for two days in a
row after The BarackStar! commandeth forth a  -ing great depression?

would you people get with the program, please?

Stocks surge on report of entity for bad debt
Stocks end sharply higher on report that government will create entity to hold banks' debt

NEW YORK (AP) -- Wall Street has ended a volatile session sharply higher after a stunning late-session turnaround that sent the Dow Jones industrials up about 400 points. The big comeback followed a report that the federal government may create an entity that will take over banks' bad debt.

The report on CNBC said Treasury Secretary Henry Paulson is considering the creation of an entity like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s.

Investors have been cheered by the notion of a huge federal intervention like the establishment of RTC to acquire the mortgage debt that has hobbled financial institutions and led to the intense volatility in the markets this week.

According to preliminary calculations, the Dow is up about 401 at the 11,010 level.

Link

[Wretched Excess]

isn't anybody listening?  this is NOT doom.

Meanwhile, crude oil prices built on Wednesday's $6 surge, rising in consecutive sessions for the first time in three weeks. Boosted by a weaker dollar, crude ended 72 cents higher at $97.88 a barrel

Link

[CactusCarlos]

isn't anybody listening?  this is NOT doom.

Yes it is!!! 

 

(I just wanted an excuse to use that smiley.  )

[Hawkgirl]

400 points!!!


2 days later...
 
Nevermind...

[Chris_]

...but, but, but I thought the Ooooobamessiah waved his magic wand hand whatever and made the economy all better.  I mean all he has to do is speak the magic words as shown on his telepromter, and we're good.  [/DUmp mode]

[Wretched Excess]

...but, but, but I thought the Ooooobamessiah waved his magic wand hand whatever and made the economy all better.  I mean all he has to do is speak the magic words as shown on his telepromter, and we're good.  [/DUmp mode]

  yeah, he's a pit bull on the campaign trail now that his pal telly prompter is with him for every speech.

but the messiah said it was the great depression.  if I don't get a  -ing great depression soon, I am gonna be royally pissed off.

[Chris_]

...but, but, but I thought the Ooooobamessiah waved his magic wand hand whatever and made the economy all better.  I mean all he has to do is speak the magic words as shown on his telepromter, and we're good.  [/DUmp mode]

  yeah, he's a pit bull on the campaign trail now that his pal telly prompter is with him for every speech.

but the messiah said it was the great depression.  if I don't get a  -ing great depression soon, I am gonna be royally pissed off.

Dammit!  And I stocked up on Zoloft, too.  I was looking forward to a really Great Depression...

Maybe I can sell them at HUGH mark-ups to the DUmmies when McCain takes office January 20th?

[Duke Nukum]

400 points up a day after a 400 point fall is not a trend.  Overall the market has been trending lower, looking for a bottom for months now.  After falling through old support the market is testing resistance.  It's called a dead cat bounce.

Sadly, there is more bad news to come regarding the financial sector.

Gas is still way up over where it was last year so the consumer sector is down also.

Housing is still a mess.

I would like to believe that 10,500 is the bottom for the Dow but it will take a few days in order to confirm.

Edit: The market rallied today essentially on a rumor that the Feds would step in and take some action.  That doesn't sound like good news to me.  I was hoping it rallied because Reid and the Democrats want to high tail it out of town.

[Hawkgirl]

...but, but, but I thought the Ooooobamessiah waved his magic wand hand whatever and made the economy all better.  I mean all he has to do is speak the magic words as shown on his telepromter, and we're good.  [/DUmp mode]

  yeah, he's a pit bull on the campaign trail now that his pal telly prompter is with him for every speech.

but the messiah said it was the great depression.  if I don't get a  -ing great depression soon, I am gonna be royally pissed off.

When he speaks of the great depression, he's referring to the state of mind the radical left will have after the Election he loses.  It WILL come....get the padded rooms ready!

[Jim]

The market rallied today essentially on a rumor that the Feds would step in and take some action.  That doesn't sound like good news to me.  I was hoping it rallied because Reid and the Democrats want to high tail it out of town.

The action being considered is an "entity" that will buy foreclosed upon houses.
With borrowed money.
And do not expect those properties to be bought at fire sale rates.

Good news paper holders, shitty news for the rest of the world.

Uncle Sam cannot bail out everything and thats why oil went up.

[Miss Mia]

Even on the front page of the Wall Street Journal today was a "This is the worst since I gotta say ethe 30s headline."

Too bad I don't go to school on Fridays, I won't be picking up tomorrow's to see what they say then.

[miskie]

Even on the front page of the Wall Street Journal today was a "This is the worst since I gotta say ethe 30s headline."

Too bad I don't go to school on Fridays, I won't be picking up tomorrow's to see what they say then.

I can already read the headlines in my "minds-eye" - infuses cash nation can't afford.. Delays inevitable.. Election motivated.. Still Bush's fault.

[Wretched Excess]

...but, but, but I thought the Ooooobamessiah waved his magic wand hand whatever and made the economy all better.  I mean all he has to do is speak the magic words as shown on his telepromter, and we're good.  [/DUmp mode]

  yeah, he's a pit bull on the campaign trail now that his pal telly prompter is with him for every speech.

but the messiah said it was the great depression.  if I don't get a  -ing great depression soon, I am gonna be royally pissed off.

When he speaks of the great depression, he's referring to the state of mind the radical left will have after the Election he loses.  It WILL come....get the padded rooms ready!

the guy is getting hysterical in his campaign speeches.  the teleprompter must be stuck in "PMS mode".

[Woody]

McCain finally blasts Obama over the FNMA debacle...

http://online.wsj.com/article/SB122182989114256587.html

Two years ago, I called for reform of this corruption at Fannie Mae and Freddie Mac. Congress did nothing. The Administration did nothing. Senator Obama did nothing, and actually profited from this system of abuse and scandal. While Fannie and Freddie were working to keep Congress away from their house of cards, Senator Obama was taking their money. He got more, in fact, than any other member of Congress, except for the Democratic chairmen of the committee that oversees them. And while Fannie Mae was betraying the public trust, somehow its former CEO had managed to gain my opponent's trust to the point that Senator Obama actually put him in charge of his vice presidential search.

This CEO, Mr. Johnson, walked off with tens of millions of dollars in salary and bonuses for services rendered to Fannie Mae, even after authorities discovered accounting improprieties that padded his compensation. Another CEO for Fannie Mae, Mr. Raines, has been advising Senator Obama on housing policy. This even after Fannie Mae was found to have committed quote "extensive financial fraud" under his leadership. Like Mr. Johnson, Mr. Raines walked away with tens of millions of dollars.

Senator Obama may be taking their advice and he may be taking their money, but in a McCain-Palin administration, there will be no seat for these people at the policy-making table. They won't even get past the front gate at the White House.

My friends, this is the problem with Washington. People like Senator Obama have been too busy gaming the system and haven't ever done a thing to actually challenge the system.

We've heard a lot of words from Senator Obama over the course of this campaign. But maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems. The crisis on Wall Street started in the Washington culture of lobbying and influence peddling, and he was square in the middle of it.

[Wretched Excess]

McCain finally blasts Obama over the FNMA debacle...

http://online.wsj.com/article/SB122182989114256587.html

Two years ago, I called for reform of this corruption at Fannie Mae and Freddie Mac. Congress did nothing. The Administration did nothing. Senator Obama did nothing, and actually profited from this system of abuse and scandal. While Fannie and Freddie were working to keep Congress away from their house of cards, Senator Obama was taking their money. He got more, in fact, than any other member of Congress, except for the Democratic chairmen of the committee that oversees them. And while Fannie Mae was betraying the public trust, somehow its former CEO had managed to gain my opponent's trust to the point that Senator Obama actually put him in charge of his vice presidential search.

This CEO, Mr. Johnson, walked off with tens of millions of dollars in salary and bonuses for services rendered to Fannie Mae, even after authorities discovered accounting improprieties that padded his compensation. Another CEO for Fannie Mae, Mr. Raines, has been advising Senator Obama on housing policy. This even after Fannie Mae was found to have committed quote "extensive financial fraud" under his leadership. Like Mr. Johnson, Mr. Raines walked away with tens of millions of dollars.

Senator Obama may be taking their advice and he may be taking their money, but in a McCain-Palin administration, there will be no seat for these people at the policy-making table. They won't even get past the front gate at the White House.

My friends, this is the problem with Washington. People like Senator Obama have been too busy gaming the system and haven't ever done a thing to actually challenge the system.

We've heard a lot of words from Senator Obama over the course of this campaign. But maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems. The crisis on Wall Street started in the Washington culture of lobbying and influence peddling, and he was square in the middle of it.

Smoke THAT one, BarackStar!

[NHSparky]

^ Dat's gonna leave a mark!

[Jim]

Actually, the only good thing about this is that the Dem Congress will have it's name taped to this trillion dollar bar tab.  Bush may have worked it out but only Congress can spend money.

And prepare to be sodomized with new class envy regulations on mortgages now and forever.

[jtyangel]

WE, with all due respect...you are deluded, as are many other here. My  husband works in this industry and he's a portfolio manager. Don't ****ing fool yourselves. We were indeed on the verge(and the verdict is still out) of market collapse. Worse depression then the 30's. Do you all even understand that the value of a money market was dipping below 1.00 a share? Do any of you comprehend what that means? How significant that is? How the banking system works and how they could not borrow or sell anything to cover cash needs ie liquidity. I've asked my other half to muster up some more stuff to show here. It really is making me ****ing sick to see my fellow conservatives because they so want to believe this is a minor correction to sit in utter denial of what is really going on.

Let me repeat...the market was on the verge of collapse---no, it was GOING TO COLLAPSE. I have sat here the last week with my husband and watched this go on. The tbill was yielding ZERO percent at one point. Look, if you are worried about admitting this, let me tell you something else that will calm your nerves. The idiot Obama who is acknowleding it, is complicit in it with the congressional black caucas, freddie mac, fannie mae, investment bankers who package the debt instruments, etc. Bush is doing some really needed and good things right now to save our asses. He really deserves a lot of credit, but we can not deny the seriousness of what is going on. Don't be foolish. What is being done now is to steer clear of an even worse scenario if it did not happen. Taxpayers will be footing the bill for this too if it all pans out.

I'm sure I'll be lambasted for this, but some of the posts discounting what the hell is going on are almost as foolhearty as some of the drivel that gets posted on DU. I love you all, but some of you really are in denial over the seriousness of this and I expect that is because your knowledge of financial markets is elementary. That's ok...just really folks..this was serious and it still is.

[Hawkgirl]

The guy on CNBC...The financial channel...I forget his name but the loud one that is always screaming and he gives his thoughts on stocks and such.  He urged everyone on Friday to sell 20% of their portfolio next week.  He predicted the DOW is going to drop much more before this correction is over.

I'm with Bank of America...do I need to close out my account, remove everything in cash and dig a hole in floor?  No...while like jtyangel, I do believe this is serious, and I do believe we're in for a major correction, similar to that of the housing market and the dot com bust of 2000....I DO NOT agree that we are headed for a second depression.

[NHSparky]

You're thinking of Jim Cramer.

[Hawkgirl]

You're thinking of Jim Cramer.

Yes him....I was    when he suggested that...that's all we need...more people to sell.

[Woody]

The guy on CNBC...The financial channel...I forget his name but the loud one that is always screaming and he gives his thoughts on stocks and such.  He urged everyone on Friday to sell 20% of their portfolio next week.  He predicted the DOW is going to drop much more before this correction is over.

If you're referring to Jim Cramer, he also suggested buying Bear Stearns right before it went tits up...  Don't listen to him or any other stock-picker.  Even if their information is correct, the market will absorb it before you can place an order.

Yes, this is serious.  No, it's not the end of the world, and it's definitely not the worst depression since the 30s.  This is a regular cyclical adjustment, exacerbated by the amount of bad mortgage debt, and the inability of the players to discern quality debt (because of a lack of transparency in the mortgage-backed securities).  

The fundamental strengths of the American economy (productivity, profit, employment, etc) have not changed, regardless of how the market prices them.  

Woody (BA, Economics)

[jtyangel]

Ahh, whipping out the credentials Don't play that game friends since I can assure you, my other half and the team that works with him could at the very least meet and probably surpass any credentials here and they actually have to move stuff everyday to keep companies liquid so they have real time experience with what is going on. The fact that two educated people in economics would sit here when something historical has happened ie money market share dipping below $1.00 a share(btw that was one of the provisions in this plan was to guarantee it would not go below 1.00 a share so apparently Bush and his advisors think this is historical too  and not just 'cyclical' ) and that the 3 mos. tbill was actually generating a negative return at one point just blows my mind. I'd like you both to tell me in your recent 'corrections' and cycles where this has happened? Please...show me how it's all the same. And tell me in light of this 'minor correction' why the historical bailout is needed. 

That said, you have misread me as advocating that people sell. No, that would just make the problem that much worse. But I can't abide by conservatives behaving like a bunch of DUers with their fingers in their ears going la la la while the shit is hitting the fan.

Hawkgirl, dot com correction and others did not have as widespread an effect on the markets as the investment banking/mortgage industry. You both talk of fundemenatals, well one of those is housing which you will both agree is in the pot right now. The financial markets too are part of our fundamentals and when the dust clears most of the larger and most well known brokerage firms that actually endured through the crash in 1929 will probably be gone. yet, this is a big nothing. Gotcha.

[Hawkgirl]

Quote from: jtyangel on Today at 06:51:39 am
yet, this is a big nothing. Gotcha.


Can you point to where I said this is a big nothing?  I believe this is a serious/significant correction.  I do not believe we're headed for a second depression.  I think the feds will do what it takes to prevent that.  Bailing out our own economy is the right thing to do...hell, we send billions of aid worldwide. 
I don't see why you're getting pissy because a few of us happen to disagree with your doom and gloom.  Your husband may work on wall street, but his opinion or his group's opinion is not the end all be all.  I know a source that would disagree.  I suppose we'll know soon enough just how bad it will get.

And comparing us to DU'ers is a bit over the top.

[Woody]

I'm not trying to out-credential anyone, so lighten up a bit.  I am pointing out that I do know more than the "average Joe" about this stuff.  And by the way... if all those employed by Wall Street firms knew what the hell they were doing, we wouldn't be here. 

I never mentioned "minor correction"; please don't put words in my mouth.  I'll quote myself again here, just to be sure...  (emphasis mine)

Yes, this is serious.  No, it's not the end of the world, and it's definitely not the worst depression since the 30s.  This is a regular cyclical adjustment, exacerbated by the amount of bad mortgage debt, and the inability of the players to discern quality debt (because of a lack of transparency in the mortgage-backed securities)

Without the bad debt out there, this would just be a regular cyclical adjustment.  But it's not, so we do need extraordinary measures to deal with it.  I don't know what those measures are, or if the Bush plan will work.  Honestly, I doubt that anyone (your infallible SO included) knows right now what needs to happen, because nobody knows how much of that mortgage debt is bad.  The stock rise was because the government finally stepped in and shouldered the burden of the bad debt, not because "everything's cool".  The libertarian side of me disagrees with this action, but the side that is concerned about a repeat of 1987 (24% one-day drop) is okay with it. 

I'm more concerned with the proportion of homeowner equity to debt and the foreclosure rate on mortgages; if a bunch of folks just walk away from their mortgages, house prices will fall drastically, making it a lot more attractive for others to walk out of their mortgages.  Rinse and repeat.  This is where it gets really ugly, and where intervention is necessary.  The exact nature of that intervention is the tricky part.