What's Happening?

This bailout was just passed, and the stocks went from +300 all the way to -50.

What's up? I thought they would be soaring right now. I thought we would see gains of 1000+ points.

Am I missing something here?

What is going on?

Its hard to say but I just got back from chatting with a buddy of mine who is also a financial advisor. Yesterday there was a nice gain in speculation that the bill would be passed. So people sold off their gains today as a short profit.

A big saying on wall street is "Buy on Rumor and Sell on News". This could be what happened.

[edit on 3-10-2008 by solarstorm]

I'm gonna hazard a guess here and say that all the fearmongering about a failure of the bailout resulting in further stock losses was never true.

We're already in too deep, and it's going to go even deeper when the short selling ban expires next week. The companies that are only still in business on paper will start to fall.

Bush signing a piece of paper will not fix this.

Dow is plunging on close. Down 168 with less than a minute to go.

when you understand what kind of earnings company's will be reporting over the next quarters you will sell on any good news. seems like when everyone sells on good news/ "rally material" the market falls steeply.

the puppets who made their BULLISH earnings forecasts earlier this year are very similiar to the ratings' agency's who called the subprime and ALT-A security's AAA rated when they were in fact S*&^ in regards to the fact that they are (frauds and shills) . The smart money got out of stocks and into bonds early in the year, the dumb money follows the MSM cheerleaders and gets bent over, and adheres to the self defeating belief that anyone parroting bad news is a doom and gloomer instead of a realist

Whats happening??

Here is what is happening!

Solar storm nailed it. Dow has for a long time been 20-25% overvalued and is now correcting. The bail out bill will just ease us to dow 8500-9000 not stop it.

can anyone tell me about the possibilities for mass "intentional foreclosures"?

If I had a house, I sure as hell wouldn't keep paying the ridiculous overage just so "sweet on wall street" can get my tax dollars.

CORE

Originally posted by anotherdad
Solar storm nailed it. Dow has for a long time been 20-25% overvalued and is now correcting. The bail out bill will just ease us to dow 8500-9000 not stop it.

AD,

Any ideas for what we might see next week?

Am I missing something here?

reply to post by MatrixBaller04


Most people did not want Congress to pass a massive bailout. The obvious reason is that it puts money back in the institutions that caused the problem in the first place. So essentially it seems obvious that not only is congress rewarding the culprits, it is waisting 700,00 billion of our money. It is clear the the problem was caused by overregulation of the banking industry by Congress (CRA 1999 under Carter). Congress had numerous opportunities to correct the problem and didn't. Up until recently incompetant Congressmen like Barney Franks and Chris Dodds were telling us that things will be ok or "just swell" as the smiling Frank put it.

And then to top it off when the ship starts to sink the Congressional wizzards try to keep it afloat by throwing in more money.

Not hard to understand why the market reacted negatively! Is there any reason for optomism now? Lets start by getting rid of some of the culprits who were at fault like Pelosi, Franks, Ried and Dodds!

reply to post by solarstorm


If i had to guess we see the dow at some point dip under 10K but rebound to around 10.2. That will set the bar for a closing under 10K in the near future. At that point we will slowly dip to 9K? over a few months and start stabilizing around there. IMO

I can't help but notice how the stock market has been acting lately. We get a big loss, then a rebound or even keel the next day, but it's still dropping overall. Looks quite familiar to the market crash of 1929 as far as this graph is showing.

reply to post by plumranch


Congress wasn't over regulating them. in 1999 they passed a bill that took out the regulations that were put in place after the great depression to keep this from happening.

the fact of the matter is there wasn't enough regulation after 1999 after the passage of the Gramm-Leach-Bliley Act and what regulation there was, was not enforced because the regulators were bribed by the lobbyists for the banks and wall street to turn a blind eye. just so they could make huge profits!

Originally posted by anotherdad
reply to post by solarstorm

 

If i had to guess we see the dow at some point dip under 10K but rebound to around 10.2. That will set the bar for a closing under 10K in the near future. At that point we will slowly dip to 9K? over a few months and start stabilizing around there. IMO

Yep...that 10,000 and below mark will be a very big psychological coming. I can see some big emotions happening if it breaks below 10k.

in 1999 they passed a bill that took out the regulations that were put in place after the great depression to keep this from happening.

If you have specific legislation, please post it. I'm talking about the CRA (Comunity Reinvestment Act) that started under Carter in 1977, was strengthened in 1979 and again under Clinton. Always the lending requirements were weakened so that less qualified applicants could get loans. All attempts to stop this government regulation of the banking industry were blocked by liberal legislators. The end result was what you see today.

See:The Government Did It

reply to post by Mercenary2007


I researched your Gramm-Leach-Bliley Act. What you said is 180 degrees off. This act strengthens the requirements for banks to adhere and abide by the loose lending requirements of the CRA. The Clinton administration made this requirement.
This bill was a bank merger bill. If banks wanted to do a merger they had to get approval by the board overseeing the strict CRA legislation. If the banks had not been lenient enough in their lending esp. relating to minorities their mergers were blocked.
Barack Obama, durring his Chicago street activist days worked for ACORN. ACORN was involved with overseeing loan procedures making sure banks gave minorities the loans they wanted. So Barack was working hard to get more of those subprime mortgages out to his friends!

Crucial to the passing of this Act was an amendment made to the GLBA, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a "less than satisfactory [sic] rating at its most recent CRA exam", essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the Community Reinvestment Act (CRA).[3]. This was an issue of hot contention, and the Clinton Administration stressed that it "would veto any legislation that would scale back minority-lending requirements." [4]

[edit on 3/10/08 by plumranch]

The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub.L. 106-102, 113 Stat. 1338, enacted 1999-11-12, is an Act of the United States Congress which repealed part of the Glass-Steagall Act, opening up competition among banks, securities companies and insurance companies. The Glass-Steagall Act prohibited a bank from offering investment, commercial banking, and insurance services. The Gramm-Leach-Bliley Act (GLBA) allowed commercial and investment banks to consolidate. For example, Citibank merged with Travelers Group, an insurance company, and in 1998 formed the conglomerate Citigroup, a corporation combining banking and insurance underwriting services. Other major mergers in the financial sector had already taken place such as the Smith-Barney, Shearson, Primerica and Travelers Insurance Corporation combination in the mid-1990s. This combination, announced in 1993 and finalized in 1994, would have violated the Glass-Steagall Act and the Bank Holding Company Act by combining insurance and securities companies, if not for a temporary waiver process [1]. The law was passed to legalize these mergers on a permanent basis. Historically, the combined industry has been known as the financial services industry.

Maybe you should have read the whole act. Very first 2 paragraghs. Hmmm

opening up competition among banks, securities companies and insurance companies.

how do you create competition? by relaxing the regulations.

and what you quoted was just 1 restriction that the GLBA didn't remove. because if they removed it then there was nothing stopping banks from buying a company like lets say General Motors. it limited what companies financial institutions could buy.

your assessment of the bill is a little off my friend this act did relax the regulations on the financial institutions but that's ok no one is perfect

I urge people not to use the DOW as any sort of indication as to how the markets or even the economy as whole are doing right now. The main intent behind this bill is to get the CREDIT markets moving and to jolt the banks bank into lending. Watch those numbers (i will try to post them). IF those numbers don't improve immediately we can expect massive bank closures as soon as next week.

your assessment of the bill is a little off my friend this act did relax the regulations on the financial institutions but that's ok no one is perfect

reply to post by Mercenary2007


You are still 180 degrees off, my friend, the bill relaxed lending requirements so that more high risk applicants could receive loans (read more subprime loans).The excessive subprime proliferation is the basic cause of our present problem IMHO. If banks didn't comply they were in big trouble with the oversight CRA beurocracy. Why do you suppose Clinton was so adamant about the CRA enforcement requirement??