Lower low on markets
Posted by Frugal on September 30th, 2008
It was just increduluous that bailout failed to pass. When the leadership is most needed, it is not there. Instead, they listened to their constituents “finally”. I can’t think of anything more ironic than that.
So where do we go from here? I think if there can be any rally, it would stop at about 121 on SPY. It would have gone much higher to 130 if the bailout was passed on Monday. Instead, I think there will be another selling panic at the end of this month.
Yes, I will come back and try again after losing almost 10% on my bottom picking. But temporarily, I will not buy into the general markets. In fact, with precious metals coming back down, I may instead switch my battle zone.
Bailout may be passed on Thursday. But it won’t have the same effect on markets as it would have passed on Monday. The longer it takes the bailout package to pass, the less effect that it would have.
Energy stocks have also broken the recent low. Looks like energy sector is going into a very deeply oversold wave 2 of Elliot wave. It may not be pretty.
Again, things are ironic. If energy prices stay high, we would be taking some necessary measures. But instead, we will sit back and relax, waiting for the next energy crisis to come, and it will be too late.
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September 30th, 2008 at 1:41 pm
No offense (ok I do mean some offense) but get your head out of your ass! It’s not about cash, it’s about trust. How does this fix the trust issue? Explain that one. Read the comments that smart readers left on your last post and take heed.
From Market-Ticker:
“The Fed threw $630 billion into the market before the vote, and yet the S&P 500 was down 40 handles anyway, and in fact tanked after the vote.
Note carefully – Paulson’s plan was $700 billion, and Bernanke spent $630 billion – almost the entire amount proposed – but failed to fix the problem.
Got it?
Good.
Now do you see what I’ve been saying?
We were about to piss $700 billion into a tornado and lose it forever.
Fortunately sane people prevailed in The House of Representatives and voted NO.
If they hadn’t, we’d have had our proof but the money would be on its way into the vortex and you the taxpayer would have been utterly screwed.
IF we are truly facing an economic catastrophe you have just seen proof that Paulson’s $700 billion will do nothing. It is my contention that to actually arrest this mess we’d need up to $5-7 trillion, and taking on that sort of debt would essentially destroy the value of our currency, cutting it in half (which means your cost of living doubles); that is, “fixing” this mess will be worse than doing nothing at all!
IF we are indeed facing a deep recession (or worse) then we will need that $700 billion to feed and house the displaced Americans here in our nation, and cannot afford to hand it to a bunch of rich (and pissed-off) bankers around the world who made bad bets and now are screaming with their hand out like a 2-year old who wants another candy bar.
Now let me make clear – I am not suggesting we do nothing, but I am stating clearly that we cannot print (or borrow) our way out of this.
The petulant child Hank Paulson, the very same petulant child who was largely responsible for causing this mess by creating subprime securitization in the first place while at Goldman Sachs (never mind Goldman shorting the same thing they were selling!) continues to insist that “his plan must be what is passed” even after The House – which is beholden to the people – said NO!
Not only that, we now have “foreign interests” ranting and raving that we should do this. Well if this is so, how come these same foreign interests have given the finger to passing bills like this on the backs of their own taxpayers for their institutions?
Ben and Hank made the mess over the space of several years, they have had over a year to clean it up, they have refused to do so, instead choosing to throw money at the problem instead of resolving the issue and now having been told “Not no but hell no!” by the United States public they are continuing to stick to a proven failed policy!
Additionally we have a President and Treasury Secretary that have committed the unprecedented, irresponsible and puerile act of intentionally inciting panic in the public and Congress as a means of attempting to ram-rod through a bill that effectively crowned King Henry and was doomed to fail – either outright or, if it was followed with yet more desperation-style expansions of the facility could have led to the collapse of our currency and ultimately our government.
Finally, a large part of the decline today was due to the lack of shorts. I saw multiple instances this afternoon of bids literally disappearing on individual stocks – that’s something that is the direct result of forbidding shorting, and it happened only on non-borrowable stocks. My best bet is that a solid 100 points – and maybe as much as 200 – of the DOW’s decline was specifically due to the shorting ban.
How does Henry Paulson not wind up ejected from the administration – or brought up on impeachment – over his acts in this regard? Is not this sort of incitement a gross dereliction of office? He has been reported to have told Congress that but for immediate passage of his bill we would see 3 million or more lost jobs within weeks! An additional 3 million lost jobs over what is happening anyway? That’s pure nonsense.
How does the media excuse themselves – especially media such as CNBC – which was parading around this afternoon calling opponents of this (now proven to be ineffective) bill “financial Tim McVeighs”, not to mention CNBC calling for a circuit-breaker size crash so as to force Congress to give them what they want?
It is time for Congress to lock up the children and let adults come into the room so we can get a bill that not only can pass but will work.
There are plans to solve this problem that will work and which involve either no or very little taxpayer money. I’ve got a plan I believe will work and there are many others. We must address the trust problem – not throw money at irresponsible and even criminal bankers who created the mess in the first place.
It is time for those of us who have other ideas to be invited to Washington DC to discuss, debate, and hammer out something that will actually work, then put that to a vote.
Period.”
October 1st, 2008 at 3:00 pm
Bailing out Wall Street will not help anyone, but the bankers. The bankers said give us the $700 Billion or else. The outrage from the US taxpayers gave Congress a message that said “hell no”.
The general public is sick and tired of greed in this country. How much money does someone need to live? The investment firms built a house of cards and the music stopped and the cards fell.
The average person is trying to work and feed his family. Health insurance and a modest roof over a families head is required to live, too. Most modest people I know are happy for what they got. Some of the rich must get a power kick out of making people poor by sending jobs overseas and breaking unions.
Its all about power. The people are saying enough!
October 1st, 2008 at 3:07 pm
This was a great post! There is so much turbulence in the market today, and people need peace of mind more than ever. I wanted to offer your readers a link to another blogger who is doing great work. He writes about our ‘childhood money messages’ and how the best approach to stability in today’s market is to resist letting these emotions control our buying/selling habits. It is really fascinating work, and something you should all check out. His name is Spencer Sherman, and you can view his blog at http://www.curemoneymadness.com/blog.
November 16th, 2008 at 1:39 pm
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