So.... were up 190 points with no bailout...
 

Is this the Market correcting itself, or is the impending imploding of our country look like a solid economy that can manage itself via the Free Market?

Where is the fear mongering today? On the radio I heard Neil Bortz ( spelling ?? ) say how this bailout drum up was the same as the drum up for the Iraq war, and here we are, it didn't happen, and we look ok...

Or is there anyone out there fighting for Oil mad max style?

Re: So.... were up 190 points with no bailout...
 

I believe today's rally (so far, anyway, it's still early enough for a selloff) is based on renewed hopes for a package to be passed. If the government announced is was no longer on the table then I think we'd see continued selling.

Re: So.... were up 190 points with no bailout...
 

It's 10 in the morning, McGraw.

I didn't see Monday as the apocalypse. The fact that you are posting on a 200 point uptick after a 700 point down (measuring by the Dow) should tell you something.

The 200 points represent people betting that the market will even exist, which the 777 point tumble called into question. The fact that all 777 didn't come back should tell ya something. It's people scraping up the nickels and dimes, all the e-traders, all of that put together. And if it's 500 by end of day, that still does not mean there is liquidity to handle every aspect of finance that scrapes along like an engine without oil.

I'm not a pro-bailout guy, but I am a sober guy. I don't think "the market will work itself out" is the way to go here.

My initial thought when they started talking bailout was that the equivalent sum should be used to buy down principle on really struggling loans directly, and let liquidity return as bad paper gets somewhat better -- although that is close to what the bailout does, albeit backwards. It seems like the bailout relieves the liquidity first, and then the government is incentivized to address the underlying bad mortgages, so the taxpayers' new "bad paper" becomes -- in some percentage of cases -- good paper.

Bubbles and inordinate concentrations of real wealth, created by three-card-monte games resulting in paper wealth which goes away (if you're middle class) and losses that can be foisted on the government (if you're an investment bank) are directly related to the deregulation of the market.

If we're seeing anything in this crisis, it's that the market, without regulation, is a toxic environment from the point of view of the people.

Witness all the right-wing republican posters here who are trying to blame Clinton or the congresses of the 90s for deregulation.

However you slice that particular blame-pie (and rest assured I have my ideas on the subject,) what you are seeing is everybody pointing a finger at someone else as being the guy who SHOULD have regulated the market but didn't.

The "unregulated markets are good for everybody all the time" theory has taken a disasterous hit these past couple of weeks, I'm afraid. I don't think a 200 point mini-rally fixes that.

I also think all sense of proportionality has fled from this discussion. We lurch instantly from "nothing's wrong" to tin-foil hat thinking about the "engineered crisis," back to "nothing's wrong."

What we need to get our heads around is this:

- since the 80s, we have progressively deregulated markets

- During that same time span, upon realization that a bubble is collapsing, we have progressively attempted to maintain markets by infusing capital, either through taxpayer money (as in the Greenspan Put in 98), or by aggressively attempting to convince the poor they should buy a home ("the Ownership Society.") This is different from JUST relaxing lending standards -- it was an exponential acceleration of the ditching of those standards, combined with exotic financing vehicles, exotic ways of trading around the securities backed by those deals, and -- unbelievably -- an aggressive sales campaign to convince those who cannot buy to do so.

- Whichever parts of this can be laid at government's door -- for example, the propaganda campaign to get those who would not buy to do so -- could easily have been undertaken by the market itself.

- Other parts of this are simply the removal of standards and regulations (for example the "old" formula that one needed 20% down.)

You're looking at the legacy of market deregulation, my friend, whomever you choose to blame for deregulation. And a 200 point swing that could be gone or doubled by the time I click "submit reply" is not the solution to the liquidity problem in the market right now.

These events did not make the sky fall, or darken it with physical clouds, or make some gigantic high-pitched whine (at least not a literal one) emanate from New York as credit seized up. But jobs will be gone at an accelerated pace, adding to our already high unemployment. We will be hurting, and it will happen all at once, if we "let the market take its course."

Like everybody else, I hate the bailout. Like most people, I think we have to do it.

By the way, the day of whining about your high taxes is -- or should be -- over. Giving the rich and the corporations their tax breaks for 7 years has amounted to 5 trillion dollars in additional debt in this country. That's the equivalent of one 700 billion dollar bailout for every year of the current administration. All we are seeing is a very rapid doubling of business as usual under the reign of George II, in terms of debt. Get your head around that.

Another way to put it... with the 5 trillion racked up BEFORE this bailout, the amount of taxpayer money being made available, if all of it is used and none of it is redeemed even at fire sale prices, is about 5 years of interest payments on debt already borrowed.

Of course, the bailout also adds to that debt.

All this to say:

1) Deregulation is what effed us in the first place, and
2) The old playbook is likely out the window. Adam Smith is nice to have on the bookshelf, now invest in a couple of Keynes' works. He's back.

PFnV

Re: So.... were up 190 points with no bailout...
 

Gold... Buy some...

Period.

Re: So.... were up 190 points with no bailout...
 

I saw four horseman in the sky. One was riding a pale horse, and there was someone following behind him....

Re: So.... were up 190 points with no bailout...
 

If the Dow goes to 10000... what does that mean? Our economy is in the tank, our country is on the brink of destruction, and life as we know it is over....

OR

Does it mean that we need to return as a society to a life more liek in the 90s where not everyone has a 300k house, and not everyone has 3 Plasma TVs, and not everyone has a 20k SUV, and that not everyone chases every get rich scheme...

It's a correction, and our economy, our real value, and morals have become so inflated over the past 10 years, that a return to the value, of the 90s wouldn't be so bad...

We can not push growth at the expesne of everything else... keeping a job here in America is worth more than saving .001 per widget... Giving tax breaks to companies KEEPING jobs is worth more to us as a society then giving tax breaks to those who export jobs...

There is VALUE in putting country over profit...

Re: So.... were up 190 points with no bailout...
 

I think your second statement is the valid one. We have to remember, the stock market is not the economy. I don't know where or why people started to talk like it IS the economy. It reflects economic trends, but not on a day to basis.

The problem we have is that no one can tell us where our economy is right now. I heard a CNN investment advisor/commentator Suze Orman say she doesn't see our economy returning to health until about 2015!

"How long is this down cycle going to last? Probably two, three, four years. I don’t want to say what I’m about to say. I don’t think you’re going to see a lot of light at the end of the tunnel until about the year 2015."

Anderson Cooper 360: Blog Archive - Financial light at the end of the tunnel could be 2015 - Blogs from CNN.com

Re: So.... were up 190 points with no bailout...
 

Remember Black Monday in 1987?

Re: So.... were up 190 points with no bailout...
 

I do...I was 28 years old.

Re: So.... were up 190 points with no bailout...
 

And it reflects fickle trends at that. They're jumpy nervous nellies, and many of them manipulate the trends to make money. I go nuts when people use it as an economic barometer.