Wallstreet Sky Rockets! 3/11/08

reply to post by pacificwind

"The economic situation in the U.S. is really black, the market is now expecting more and more cuts from the Fed and we have more and more news of financials experiencing difficulties," said Carole Laulhere, currency strategist at Societe Generale in Paris.

www.cnbc.com...

What part of this says no more rate cuts to you?

reply to post by HimWhoHathAnEar


What part of this says to you that investors are selling off because of a rate cut?

Around and around we go.

On the day of the upswing:

The prospects for an emergency rate cut before the Federal Open Market Committee meets next week have dwindled.

Source: www.reuters.com...

So let's see. On the day of a huge upswing, everyone thinks there is no rate cut, which is something that causes sell offs. This is a negative impact on the market. The liquidity push was a positive impact. Put them both together...


[edit on 13-3-2008 by pacificwind]

reply to post by pacificwind

Futures indicate that traders see about a 60 percent chance that the U.S. central bank will cut benchmark rates by 75 basis points next week, versus a 100 percent chance late on Monday.

www.reuters.com...

Here is the paragraph just before the one you posted. An 'emergency' cut would mean before the upcoming meeting. Hellooooo....

Originally posted by marg6043
If anybody has been following the markets since last year they should know the trend, bail out markets spike, for a week, end of week markets down.

What the markets is not getting and neither Banarke is that the housing crash was no a limited and Isolated incident, the repercussions of the crash has spread like a disease in all the areas that the housing was linked too.

Is like a domino effect until the last domino comes falling is not stop to it, you can delay it , make it look better, wait for the stimulus package to come and make a difference but the down fall can not be avoided.

Low employment rates, oil prices to the roof, millions of people losing their home, jobs and becoming homeless is something that no stimulus check is going to fix and the bail out from te fed neither.

My thoughts exactly....

The sub-prime market crashes due to profiteering and then it gets outsourced and bought back at low levels and another profit is made - simple really

basic finance 101

reply to post by HimWhoHathAnEar


Hellooooo, the fear of no emergency rate cut supresses stocks. You are really grasping for straws here. Since it is quite obvious your in this to confirm your worldview and desperately want the last word here, even when you've been shown to be wrong, I'll let you have it. I hope it makes you feel better about yourself.

A review of the facts: no emergency rate cut is a negative factor, a cash infusion is a positive factor for the market. What happens when a negative and a positive come together?

posted by pacificwinds
In all reality if the fed wanted to stimulate the market all they'd need was another rate cut. The cash infusion canceled any chance at a rate cut. A cash infusion makes the market go up, and the knowledge that no rate cut is coming makes the market go down, so it was zero sum game.

Once again, here are your own words. A rate cut has not been canceled out as your own reuters piece stated. There will be a cut at the meeting. It's only a question of how much. Not the right thing to do but Helicopter Ben will do it for his Old Boys anyway.

[edit on 13-3-2008 by HimWhoHathAnEar]

Originally posted by pacificwind
reply to post by HimWhoHathAnEar

 

A reply to Pacificwind. I forgot to hit the button

A review of the facts: no emergency rate cut is a negative factor, a cash infusion is a positive factor for the market. What happens when a negative and a positive come together?

You are right. This action will not fix the underlying problems with the Economy though. It's temporary and only lasts a few days until it bombs and than something else happens again. Look at the charts for 2008, spike and drop spike and drop. While in the meantime we drop below 12,000.

The credit market is done for and it turns out retail was off greater than expected and now after our 400 point DOW rally we get just two days later two stocks falling for everyone that gained in New York. That $200 billion infusion was like putting jumper cables on a dead battery. Some people took it as a sign at how bad the banking system really is. injected liquidity is like giving a patient morphine before to ease the pain. Fed rates are getting cut sure, but what about mortgage rates and rates on corporate bonds? Which direction are they heading? (it's up) What are the big players in credit and banking trying to do right now? Dump all their risk and that's screwing the markets. $200 billion infusion equals quick fix to avoid big crash brought on by the situatuion in the credit markets.

We did find some support and are back over 12,000 again today thankfully but it is only temporary. There can be no recovery without addressing the underlying problem and no amount of Rates cuts is going to do that.

Think about right now. Commodities are up while the dollar declines and credit is retracted. What becomes of that?
Momentary liquidity does nothing barring the perception of a good moment.

As far as trusting government numbers I suggest you look into how they come up with unemployment numbers. The truth of the matter is amazing. Unemployment is manipulated in th esame way as inflation statistics by the Fedgov. I too have spent some time working with statistics beyond what was required in college and find it far too evident the manipulation which takes place when it comes to our Governments economic figures.

Truly think about what the Fed did. TSLF will "lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days (rather than overnight, as in the existing program) by a pledge of other securities, including federal agency debt, federal agency residential-mortgage-backed securities (MBS), and non-agency AAA/Aaa-rated private-label residential MBS. The TSLF is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally.” (Fed statement)

Can you spell I-N-F-L-A-T-I-O-N? Why do you think the dollar is performing so well?

Not only that but TSLF will allow the Fed to take less than appropriately valued mortgage backed securities as collateral

Think about this statement,
"In the United States, a new tipping point will translate into a collapse of the real economy, final socio-economic stage of the serial bursting of the housing and financial bubbles and of the pursuance of the US dollar fall. The collapse of US real economy means the virtual freeze of the American economic machinery: private and public bankruptcies in large numbers, companies and public services closing down massively.” (Statement from The Global Europe Anticipation Bulletin (GEAB)

You accuse others of making the situation fit their world view, I contend that you are guilty of this yourself in a major way. Will the economy crash catastrophically? Who knows? It very well may and to just deny it outright in spite of evidence to the contrary says something..





[edit on 13-3-2008 by Tinhatman]

2008 is a year of change, good or bad is only human's inablity to see the big picture but as far as the markets go if we don't do something about the credit situation then we are all screwed

reply to post by Tinhatman


I agree that the underlying problems of the economy are not going to be fixed by such government actions. But I do not see a "problem" in the economy as something that the government should be fixing. Businesses and consumers made this problem, they should get out. Businesses need to go bankrupt, and consumers need to lose their homes if they can't afford it. At the same time, I do not think credit problems are going to cause a depression. They may be the cause of a recession, as part of the normal business cycle.

I know exactly how unemployment statics are calculated, I had the unfortunate experience of taking an entire graduate class in public policy statistics. I have no doubt that government statistics are spun, and I have no doubt that the statistics themselves are not. If people listen to the government spin then they deserve what they think, people should look at the data themselves - it does not lie.

Again, I do not find a worldview and force data to fit my view. I look at the data and come to a conclusion. It would be very easy for me to buy in the economic disaster/doom and gloom world view here, because its a part of the group think. But I can't, because it s not what the data says.

reply to post by pacificwind


See I took this all the other way. Up until this month all the Mainstream economists were talking about a slight slow down or a "hiccup" and that the idea that this was the "end of all things" was more of an underground view. I felt (until maybe a week ago) that the majority of people especially in MSM were taking a far to rosy view on the current situation and that the "everything was gonna be ok pretty soon" was the group think. I myself until September of last year figured it might not be a big deal though I had started worrying in late 2006 due to housing.

The government interference and the Fed itself along with business caused this problem. In a free market economy this kind of thing would not have happened, it would have corrected itself. Hell, Greenspan would not have even have been able to cut rates in 2001 which is one of the Major causes of this whole fiasco.

Businesses need to close, Banks need to shut down, People need to lose their homes that bought more than they could afford, and I think we may find a good number of former hedgefund managers ending up in jail for fraud!

The way I read the data we are proper fudged. Like I said before, the perfect storm. Credit, Banking, Stocks, Fed manipulation, Currency issues, Commodities, etc etc etc. Everything is fudged and the Fed itself is screwing investors that Shorted.

Every issue can be seen from different angles though, disrespect should never be part of a debate!

www.oregonlive.com.../base/business-3/1205492650264050.xml&storylist=business

Just an article about how the stocks are predicted to open today, I'll give another update so I can show up all the posters who said we'd have a drop before then end of the week. Looks like our economy has an actual chance to level out, an if "you" want to arrogantly deny that fact well keep being negative; it's easier.

the stock market is more of an indicator as to the public's perception of corporate wealth than it is to the actual state of the national economy. it's a reaction to those "record profits" that they keep touting. when you consider that much of that record profit is being gained by investing in overseas labor and such, well, in reality it's more money being taken from the US economy and being sent overseas. ya, alot of it comes back, but not that much that actually is allowed to trickle back down into our economy. and the american consumers consume ALOT, their lack of participation would be a major setback for the world economy! too many people have been finding it hard to make ends meet for too long, guess what, they've been using credit cards, second mortgages to keep up their consuming. the credit system is busting, so who is gonna do the consuming? that top 5 or 10 percent at the top with their overly generous pay packages aren't gonna pick up that much slack. the corporations aren't giving out that big of dividends and to be honest, people who are taking second mortgages on their house to find the funds they need to live don't seem to be likely candidates to be investing in the stock market anyways. you economic system seems to have reached a breaking point. the government has to give them the money to spend, so the chain isn't broken. so the little clerks in the store can still make their minimum, under living wage salaries by selling you their goods. we are becomming a communistic country before our eyes.....all the while blasting the danged liberals saying they they will bring us into that reality...
ignoring the fact that we are there!!! the economy can't run now with the governemnt giving out billions of dollars so you can go down to the dollar store and buy cheap chinese toxic products!!
but oh, ya, all's great with the economy!!!

reply to post by Lokey13



as i see it, the past week has been that 'program trading' that the big guys use...

now these 'program trades' probably have a new variable for buying/ selling, and that is th promise that th dolla won't fall any further,
as the foreign holders of those dollars are losing wealth big time...

so an overvalued stock market is supposed to attract the investors like flys to honey.


the giant swings in volatility is also aproduct of many of the big guys in investment funds are rebalancing their holdings ...and some are even changing the makeup of their portfilos... going heavy in commodities and lightning up on financials...
all these things are making the market volitile & wild...

but in the really long run, US Treasuries will collapse as China will want to monetize their holdings of US treasuries, and the rest of the world will make 'a run on the bank' as-it-were... as US Treasuries will trade at less than 1.5% sometime after the China Olympics when they cash in their treasuries in 2009.


the only thing America has left is the mighty military and the nuclear arsenal... all the good-will has evaporated except for pockets of adoration like Guam, Puerto Rico, Bahamas, .....

reply to post by St Udio


As I have predicted several times, America will not fall below any other nation in wealth nor power with out a reactionary war, one depending on how the situation turns out, will be the likes of which that have never been seen before.

A Nuclear arsanal its self will never prevent a economic/social collapse.. Russia proved this, and the several other nations that areby all means 3rd world and have nukes..

Becaue no one will ever use them.. those days are gone I believe.

However, at the time when the USSR fell, there was so much divide within the Union and so many social problems let alone financial, no military reaction could possibly take place.. simply put there where to many large armies that would have destroyed them at quick speed.

The US however is unmatched, if nations continue dumping the dollar, and we do suffer a depression (possible, but not probable) there is literally nothing to stop us from producing more war to fuel a small to medium sized industrial boom.. yes, war is profitable, big time... national debt has little to do with wealth, so long as the people have money (hence why WWI and WWII where so profitable..)

These do not have to be world war 3 type wars.. no, small wars to secure resources will provide enough umph to the economy to create another 10 years of economic gains.. Iran, Pakistan, maybe some African countries.. the Iraq war is no longer profitable because we are no longer producing war, we are however, building a nation.

Of course, the downside is that this is expanding the gap between the rich and the poor.. but no one should have expected that to ever last anyways.. it was a utopian dream that was never meant to come true.. the Middle class will eventually disapear or at least, be less defined then what it was / is..

Unless the underlying problems with the American economy are adressed and fixed, we will only see further economic distress, I think we need to see more job layoffs, more businesses close and new laws passed to regulate banks before anything is fixed..

Just my opinion of course.. (ya brother, I am a true doom and gloomer, lol, yet I consider my self a realist.)

reply to post by Rockpuck



We are on the same page.


your resource wars scenario is way-more than a fiction,
although it will be Spin that will make it seem we are freeing people from tyranny and bondage....

hogwash... its profits and continuing a struggle hold on the worlds economic engine thats driving Pax America



[edit on 14-3-2008 by St Udio]

reply to post by Lokey13


Yeah, looks like it'll level out once it hit's zero. Zero is level right?

1:15pm down 251 points. 11,893 right now.

We'll see if we rally before close. Otherwise....

[edit on 14-3-2008 by Tinhatman]

[edit on 14-3-2008 by Tinhatman]

reply to post by Tinhatman


Bear Stern down fall unavoidable, it seems that they are under so much stress that now is rumors of a run for the banks.

Like I said before the mess that this banking institutions are in is a lot bigger that they were predicting.

But as usual the big CEOs are bailing out themselves and where are the arrest, prosecution and corruption scandals?

reply to post by marg6043


Oh there won't be any arrests. They are gonna bail each other out, pat themselves on the back, and have martini's on their yachts while the rest of us watch th ewalls come crashing down. Truly, a bunch of Wall Street guys will get clobbered and fail but those in the know will walk.

I wish a bank would just throw money at me when I got myself in a pickle. Guess I am not special enough.

Originally posted by Tinhatman
reply to post by Lokey13

 

Yeah, looks like it'll level out once it hit's zero. Zero is level right?

1:15pm down 251 points. 11,893 right now.

We'll see if we rally before close. Otherwise....

You'll notice that the Feds line in the sand has been 12,000. Anytime it dips below that they come out with some inflationary measure (which is all they have). Same thing today. Measures were taken by the PPT to halt yet another fall so as to not enter a weekend down for the week. Ending down for the week after a 200 Billion injection, I mean Inflation, would have let the cat out of the bag beyond any doubt. As if Bear Stearns failing isn't enough of a sign.



[edit on 14-3-2008 by HimWhoHathAnEar]

reply to post by Tinhatman


Well funny thing is the Dow finished up for the week, and S&P + NAS finished down but not so far down from what they had gained. The week in stocks has left us a little better then last week, I admit not much of a gain but any progress is good progress. Look for the stocks to sky rocket in the US because the Pharmacutical Companies are going to start buying and selling as the year comes to summer.