NationStates Jolt Archive

America's biggest failed bank, Citibank, is reporting that it made a lot more than it lost in the first two months of 2009. This has caused the global stock market to jump upward.
Citibank has said it intends to use the profits to buy shares in other companies and other banks. It is also possible they might hire back some of their employees that had to be laid off last year.
If this means that America has already hit rock bottom, this is the ideal time to invest in the stock market, while prices are still very cheap. But it's bad for future home owners because home prices will sky rocket again and without any controls.
The upside is that the unemployment rate should start to drop sometime by the start of summer.

That's seems like a long time to wait for jobs to start opening up.

source?

Source?

EDIT: You win this round, CtP.

Simple google search, people.

http://www.google.com/finance

America's biggest failed bank, Citibank, is reporting that it made a lot more than it lost in the first two months of 2009. This has caused the global stock market to jump upward.
Citibank has said it intends to use the profits to buy shares in other companies and other banks. It is also possible they might hire back some of their employees that had to be laid off last year.
If this means that America has already hit rock bottom, this is the ideal time to invest in the stock market, while prices are still very cheap. But it's bad for future home owners because home prices will sky rocket again and without any controls.
The upside is that the unemployment rate should start to drop sometime by the start of summer.

That's seems like a long time to wait for jobs to start opening up.

One day of rising stock doesn't equate to a turnaround.

source?

Here's the CNN

http://money.cnn.com/2009/03/10/markets/markets_newyork/index.htm?postversion=2009031011

And the Beeb

http://news.bbc.co.uk/2/hi/business/7935533.stm

America's biggest failed bank, Citibank, is reporting that it made a lot more than it lost in the first two months of 2009. This has caused the global stock market to jump upward.
Citibank has said it intends to use the profits to buy shares in other companies and other banks. It is also possible they might hire back some of their employees that had to be laid off last year.
If this means that America has already hit rock bottom, this is the ideal time to invest in the stock market, while prices are still very cheap. But it's bad for future home owners because home prices will sky rocket again and without any controls.
The upside is that the unemployment rate should start to drop sometime by the start of summer.

That's seems like a long time to wait for jobs to start opening up.
Boy, I sure don't see any positive news on Citibank. I'd love it, if there was, but where?

SNIP

oh hush, if we are cynical enough we can push the world into a depression :)

Boy, I sure don't see any positive news on Citibank. I'd love it, if there was, but where?


Yeah, Citi is literally doomed to hell. Today was a nice bear market rally.

I doubt this means an increase in home prices any time soon. You need buyers, and there's too much unemployment for the housing market to return for a while yet.

Boy, I sure don't see any positive news on Citibank. I'd love it, if there was, but where?

http://www.grandforksherald.com/event/article/id/110018/group/home/

Simple google search, people.

http://www.google.com/finance
$112 Billion in bad loans still left? Not convincingly good stuff. Their profitability this quarter is only due to the crappy five preceeding quarters. Still not great.

This is a very positive sign but doesn't signal a complete turn-around. I am glad to have some positive news on the stock market.

The Worst Is Over

We'll see.

This is a very positive sign but doesn't signal a complete turn-around. I am glad to have some positive news on the stock market.

What I can see from this is that Citi has been borrowing money at 0,.0% and lending it at more than 0.0%. How can you not make money when that happens? Plus, they're still going to have to write down a bundle of toxic loans.

I'm glad they had a good day, but they're a long way from turning things around.

This is a very positive sign but doesn't signal a complete turn-around. I am glad to have some positive news on the stock market.

It's not a very positive sign. It's debatable whether it's even vaguely positive.

Stock markets aren't generally determined by single day trading - let's see how this bears out before we try to make too much of it.

It's not a very positive sign. It's debatable whether it's even vaguely positive.

Stock markets aren't generally determined by single day trading - let's see how this bears out before we try to make too much of it.

I don't particularly care about the stock market, rather, it's Citi that I'm more interested in. If, if, if it can maintain profitability then this might signal that banks have absorbed their losses and burned through this. Of course, it might just be fluke, we really can't tell yet.

I don't particularly care about the stock market, rather, it's Citi that I'm more interested in. If, if, if it can maintain profitability then this might signal that banks have absorbed their losses and burned through this. Of course, it might just be fluke, we really can't tell yet.

I don't know about 'fluke'. It's more like Citi is currently peddling with stabilisers on AND daddy still holding the seat. That doesn't mean Citi can ride it's bike.

it's

Its. No apostrophe.

I don't know about 'fluke'. It's more like Citi is currently peddling with stabilisers on AND daddy still holding the seat. That doesn't mean Citi can ride it's bike.

If it proves systemic, then it could be the moment that will later be recognized as the turnaround, but we can't see that yet. That's what I'm saying.

Its. No apostrophe.

Stop wasting my time with your punctuation meanderings.

Besides - when I was at school, 'it' was treated as a singular noun, which makes an apostrophe-s the correct mechanism for indicating a possessive.

Whether Americanisation has caught on, or the rules have changed - I honestly don't give a shit.

If it proves systemic, then it could be the moment that will later be recognized as the turnaround, but we can't see that yet. That's what I'm saying.

If it's systemic, then the 'turnaround' was the injection of 'bail-out' funds.

What I can see from this is that Citi has been borrowing money at 0,.0% and lending it at more than 0.0%. How can you not make money when that happens? Plus, they're still going to have to write down a bundle of toxic loans.

I'm glad they had a good day, but they're a long way from turning things around.

Agreed. It was just days ago when people thought Citi would have to sell or fold so this is a positive sign. If they can manage to restructure their debt and continue to make a profit then one of the largest banks will have been saved.

It's not a very positive sign. It's debatable whether it's even vaguely positive.

Stock markets aren't generally determined by single day trading - let's see how this bears out before we try to make too much of it.

This is a debate site so yes it's debatable. It's a positive sign for Citi, if not the market. Of course market factors are more reasonably looked at over 3,6, 12 and 15 month cycles. Checking their p/e and cash on hand over this time gives a decent indication of their overall health. Of course no one can ever be sure and that's why they call it risk.

That's what we call "short covering". I'm not buying it just yet.

If it's systemic, then the 'turnaround' was the injection of 'bail-out' funds.

If it was the bail out funds, we'll have to credit Bush for saving the economy. Since he went ahead with the bailout when just about everyone else opposed it.

Checking their p/e and cash on hand over this time gives a decent indication of their overall health.

No, it doesn't.

It might give you a snapshot of things like liquidity, but it doesn't really address overall health at all.

If it was the bail out funds, we'll have to credit Bush for saving the economy. Since he went ahead with the bailout when just about everyone else opposed it.

I'd say you didn't know what you were talking about, if that's how you remember even history that recent... but, overall, it doesn't matter.

If it turns out that BUsh saved the economy, or Obama saved the economy, or Oprah fucking Winfrey saved the economy, I'm happy whichever way. I like the idea of a saved economy, no matter who I have to thank.

http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090310_761018.htm?chan=top+news_top+news+index+-+temp_top+story

Wait. Did he just say that if you "ignore bad assetts" the bank is actually making money?

The bank passed a self imposed stress test? What happened to the stress test mandated by the Obama administration? How did they do on that one?

Like Hager, Michael Church of Addison Capital in Yardley, Pa., is optimistic that the rally could be sustained given the coincident news from Fed Chairman Ben Bernanke that the recession might very well be over by yearend. "That Citi is saying they are making money is good enough right now," says Church. "The market was factoring in a doomsday scenario, and we were well oversold. I wouldn't be surprised if this turned into a serious rally."

Meanwhile, the IMF sees a 'Great Recession' (http://www.bloomberg.com/apps/news?pid=20601087&sid=aSlPjPhmvqrY&refer=home).

March 10 (Bloomberg) -- The International Monetary Fund expects the global economy to contract this year and the slump will be the worst “in most of our lifetimes,” Managing Director Dominique Strauss-Kahn said.

The global financial crisis that has slashed international trade can now be termed the “Great Recession,” Strauss-Kahn said in a speech to African central bank governors and finance ministers in Dar es Salaam, Tanzania today.

“The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes,” Strauss- Kahn said. “Continuing deleveraging by world financial institutions, combined with the collapse in consumer and business confidence is depressing domestic demand across the world.”

The IMF had forecast in January that the global economy would expand 0.5 percent this year. The World Bank said in a March 8 report that the international economy was likely to shrink for the first time since World War II, and trade will decline by the most in 80 years.

European governments from Dublin to Athens have committed more than 1.2 trillion euros ($1.5 trillion) to protect their banking systems and leaders pledged to spend a combined 200 billion euros to try and lift their economies out of the worsening slump. The U.S. is spending $787 billion on an economic stimulus package to revive its economy.

IMF Resources

The IMF is aiming to double its resources to $500 billion to better address the crisis, with Japan already pledging an extra $100 billion. Strauss-Kahn said he is “confident” the Group of 20 countries will agree to this goal at a summit in April.

He urged better coordination between leading nations to help boost the global economy and called on rich countries to “reject protectionism, both in trade and finance.”

“If one crisis amongst all crises in the world that requires some coordination, it is this crisis,” Strauss-Kahn said. “It’s a global crisis, so the solution can’t be implemented by one country alone.”

Finance ministers from the 20 largest industrialized and emerging-market economies will meet in London this weekend, as the U.S. tries to push European governments to increase spending to stimulate their economies.

Poor countries may be worst hit by a slump in economic growth and trade because poverty will increase, the IMF managing director said. That increases the threat of political conflict and even war in some regions, he added.

Economic growth of about 3 percent forecast for Sub-Saharan Africa may be “too optimistic” and the global crisis threatens to wipe out economic progress in the world’s poorest continent in the past decade, Strauss-Kahn said.

“We have to be concerned that the remarkable gains achieved by Africa over the last decade are now under threat,” Strauss- Kahn said. “As growth around the world has almost come a halt, demand for Africa’s products is plunging.”

No, it doesn't.

It might give you a snapshot of things like liquidity, but it doesn't really address overall health at all.

Well enlighten us with what does show this then. What makes a company have overall strength?

Well enlighten us with what does show this then. What makes a company have overall strength?

Not having an epic volume of toxic, worthless assets leveraged on an ever-shakier capital base would be a sign of health.

Not having an epic volume of toxic, worthless assets leveraged on an ever-shakier capital base would be a sign of health.

Thanks for stating the obvious, but that was not my question. I'm not speaking in finite terms referring only to Citi.

Thanks for stating the obvious, but that was not my question. I'm not speaking in finite terms referring only to Citi.

I just told you the story of the entire financial sectors of every country on the planet.

Meanwhile, the IMF sees a 'Great Recession' (http://www.bloomberg.com/apps/news?pid=20601087&sid=aSlPjPhmvqrY&refer=home).
And Germany's export figures turned out weaker than expected as well.

Even somehow assuming a miracle and believing that Citi survives relatively scare-free from now on, the damage is done. Households and companies across the globe need to pay back debts, which means the real economy is in the toilet, which means banks will find both quality borrowers as well as solid capital investors hard to come by.

I say dead cat bounce.

Yarr 'tis but the calm before a storm. Mark my words ye'll have to take arms against a sea of troubles before this 'worst' be over.

They're getting to remove citibank from the DOW industrials because of the government involvement.

http://www.reuters.com/article/marketsNews/idUSN1054054020090310

They also want to remove GM.

AIG has apparently already been kicked off the DOW, being replaced by Kraft Foods.

AIG has apparently already been kicked off the DOW, being replaced by Kraft Foods.
Didn't this occur last summer?

Thread title sounds like famous last words.....

When the technologically advanced evolutionary descendants of the two cockroaches that will be the only creatures to survive this recession find the NSG servers in several million years time, they will laugh at this thread and the bizarre and deluded optimism contained in the OP. They will then rightly conclude that the human race was very, very silly.

Didn't this occur last summer?

In September. Not sure if that counts as last summer.

Thread title sounds like famous last words.....Famous Last Words of A Fool. You listen to country?

and i bought citi bank stock when it was bargin basement !!1


I doubled my money my money!!!


now to sell these with out paying taxes.

If i buy life insurance with an early pay out option to a fictitious person overseas I shouldn't have to pay a dime.


now where to spend my 25 bucks ...

I still say the worst is yet to come.

Proof: There haven't been any bears yet. Or any dinosaurs. And we're not in the position where the only person who can save the world is a twelve-year-old kid with severe emotional problems. Nor have the dead risen to make war upon the living, while demon-infested cultists rebel against humanity to destroy its mighty works and bring its once thriving technological base to the ground.

I'm not expecting an actual turnaround before 2012 or so, and even then it'll be slow, uphill progress.

and i bought citi bank stock when it was bargin basement !!1


I doubled my money my money!!!


now to sell these with out paying taxes.

If i buy life insurance with an early pay out option to a fictitious person overseas I shouldn't have to pay a dime.


now where to spend my 25 bucks ...

Invest in tacos!

Invest in tacos!

Always a safe bet.

Also, one sliver of good news in a continuing shitstorm of crap news does not seem like an occasion to pop the champagne.

Always a safe bet.

Also, one sliver of good news in a continuing shitstorm of crap news does not seem like an occasion to pop the champagne.

On the other hand when it comes to the stock market, confidence leads to stability more than vice-versa.

On the other hand when it comes to the stock market, confidence leads to stability more than vice-versa.

The path, then, is clear. Free tacos on the trading floor.

The path, then, is clear. Free tacos on the trading floor.

That's socialist!

$1.00 tacos. ;)

That's socialist!

$1.00 tacos. ;)

so expensive. the Mexicans in the van outback, sell huge taco's for $.25 ... and it is mostly made with beef.

so expensive. the Mexicans in the van outback, sell huge taco's for $.25 ... and it is mostly made with beef.

Well, they say it's beef. As a perk, the rat population has plummeted. ;)

so expensive. the Mexicans in the van outback, sell huge taco's for $.25 ... and it is mostly made with beef.
Yes .... "beef."
"Beeeeeeeeeeeffffffffff"
"Beef"
"Beuf"
"Carne de res"
"Rindfleisch"
Right. Definitely. The meat that comes out of the back of that van is absolutely, totally 100% "beef." And it came from a cow too. A barking cow. A barking cow with a little collar on its neck. But it was really a cow, they swears it, the Mexicans in the back of the van do. A cow with a penis, but the testicles were oddly missing.

I might actually agree with the title of the thread; the price of copper has stabilised over the last few weeks, and is around the $1.50 a pound mark. Since copper is used in a number of things, such a stabilisation is a good sign. The other commodity I would be examining is lumber; since that is used in houses, an increase in the price of lumber would be a sign of recovery in the construction industry.

I might actually agree with the title of the thread; the price of copper has stabilised over the last few weeks, and is around the $1.50 a pound mark. Since copper is used in a number of things, such a stabilisation is a good sign. The other commodity I would be examining is lumber; since that is used in houses, an increase in the price of lumber would be a sign of recovery in the construction industry.

http://news.smh.com.au/breaking-news-business/oil-gold-prices-tumble-20090311-8udu.html


gold prices down about 100 off peak. means investors are starting to feel safe investing. if gold gets down to 600 USD an ounce i would say we are good again.

I might actually agree with the title of the thread; the price of copper has stabilised over the last few weeks, and is around the $1.50 a pound mark. Since copper is used in a number of things, such a stabilisation is a good sign.
$1.50 is a wait-and-see price, still counting on some sort of recovery in early 2010.

It's not coming.

No, it doesn't.

It might give you a snapshot of things like liquidity, but it doesn't really address overall health at all.
P/E sure does help tell where other investors think the company should go, earnings-wise, that is. And cash on hand is a good indicator of how the company's cash flow is going. I'd much rather see a company with a large postive cash on hand.

As an irrelevant aside, what was Obama talking about when he referred to "... profit and earnings ratios..."? Not the P/E I look at.

9% (actually my mistake). Housing market in shambles. Stocks at the lowest point since the 70's or earlier. Consumer confidence bottomed out. Maybe there is no further we can go down for the moment?

9% (actually my mistake). Housing market in shambles. Stocks at the lowest point since the 70's or earlier. Consumer confidence bottomed out. Maybe there is no further we can go down for the moment?

meh? Stocks are about 1997 levels. Low, certainly, but nowhere near "70s or earlier". Highest dow average in the 70s was 1051 in 1971.

Adjusted for inflation that still comes out about $5,583

Yes .... "beef."
"Beeeeeeeeeeeffffffffff"
"Beef"
"Beuf"
"Carne de res"
"Rindfleisch"
Right. Definitely. The meat that comes out of the back of that van is absolutely, totally 100% "beef." And it came from a cow too. A barking cow. A barking cow with a little collar on its neck. But it was really a cow, they swears it, the Mexicans in the back of the van do. A cow with a penis, but the testicles were oddly missing.

o_O

Invest in tacos!

What about Soylent Green?

Another "rally" today.

We'll see if this continues.


I wonder, if the stock market continues to rally, will the idealogues who blamed Obama give him credit now (Id say he deserves neither credit nor blame at this point, but Im consitant)?

Another "rally" today.

We'll see if this continues.


I wonder, if the stock market continues to rally, will the idealogues who blamed Obama give him credit now (Id say he deserves neither credit nor blame at this point, but Im consitant)?

No. It will be Reaganomics finally coming through.

No. It will be Reaganomics finally coming through.

You know whats really sad?


Thats exactly what they'll say.

You know whats really sad?


Thats exactly what they'll say.

I know.

What about Soylent Green?

Soylent Green is an investment in people. :)

Another "rally" today.

We'll see if this continues.


I wonder, if the stock market continues to rally, will the idealogues who blamed Obama give him credit now (Id say he deserves neither credit nor blame at this point, but Im consitant)?
The 'rally' is down -50 from opening... So much for that. I'm sure the correction would have been much smaller if the government hadn't taken on the creation of several trillion dollars of new debt in an effort to 'help' the markets.

If that's Reaganesque, wonderful. And credit Obama for anything good in this market? Hell, the man doesn't even know what a P/E is.

And credit Obama for anything good in this market? Hell, the man doesn't even know what a P/E is.

So you basically admit your content to blame him for everything, but not give him any credit?


This is more or less what I predicted. Im just glad you own up to it.

So you basically admit your content to blame him for everything, but not give him any credit?


This is more or less what I predicted. Im just glad you own up to it.
If he does do something smart -- and I don't believe he's capable of it in the economic field, I'll give him credit. It's no coincidence that the decline in the DOW is steeper since he took office than during any similar time period since 9/11/2001. No one trusts him.

Now, he has said a couple good things about education. And some more stupid things about the economy. Merit pay for teachers and support of charter schools is great. Buying laptops to stimulate the economy? Stupid.

I'll give him credit when it's due. I just don't expect that to happen very often.

so expensive. the Mexicans in the van outback, sell huge taco's for $.25 ... and it is mostly made with beef.

Ah yes, like C.M.O.T. Dibbler's sausages made with genuine pig. (Not pork -- pig. We can't have any false advertisement, after all.)

4 states with unemployment over 10%, in January. Georgia has it's highest recorded unemployment. 2 more states within .3 of a percent of 10% unemployment.

One heavily subsidised venture, and a day or so of profitable trading - not reliable markers of the overall state of the economy.

It's no coincidence that the decline in the DOW is steeper since he took office than during any similar time period since 9/11/2001.

You're right it's no coincidence.

He took over a boat with a hole shot in the floor.

It's no coincidence that the decline in the DOW is steeper since he took office than during any similar time period since 9/11/2001. No one trusts him.
How on earth can you make such a bold statement like that, when the US is in the middle of a major economic downturn, and has been since Obama came to power?

How on earth can you make such a bold statement like that, when the US is in the middle of a major economic downturn, and has been since long before Obama came to power?

Fixed.

You're right it's no coincidence.

He took over a boat with a hole shot in the floor.
But if you actually look, the DOW is more or less stable from right after the big decline in October until Jan 20. Then it heads toward the bottom and doesn't look back. That tells me that investors were willing to give him a chance. It's Obama that didn't keep the faith with investors, not the other way around.

Citibank got better because its inefficient managers were replaced when government took a big share in operations.

i like capitalism, but the inefficient need to be shot and replaced.

If he does do something smart -- and I don't believe he's capable of it in the economic field, I'll give him credit. It's no coincidence that the decline in the DOW is steeper since he took office than during any similar time period since 9/11/2001. No one trusts him.
I'm sorry, but that is a really, really stupid argument.

There are about a billion things affecting the share market on any given day. Within a big financial crisis, with bad numbers coming through every day, people trying to call bottoms and getting into margining trouble and the realisation coming through one knucklehead at a time that this is not going to be over in early 2010, and you blame the President?

Does that mean that George Bush was responsible for the market going down after the dot.com thing? Because they didn't trust him, they chose to get out of their comically overvalued positions? So with a more trustworthy president, they wouldn't have?

I'm sorry, but that is a really, really stupid argument.

There are about a billion things affecting the share market on any given day. Within a big financial crisis, with bad numbers coming through every day, people trying to call bottoms and getting into margining trouble and the realisation coming through one knucklehead at a time that this is not going to be over in early 2010, and you blame the President?

Does that mean that George Bush was responsible for the market going down after the dot.com thing? Because they didn't trust him, they chose to get out of their comically overvalued positions? So with a more trustworthy president, they wouldn't have?

Dont expect consistancy. When the economy goes sour, even when it starts three months before Obama is elected, its all his fault, and Bush is absolved of blame. Yet if anything good happens, well, Obama gets no credit, and Bush will probably get it. Or Reagan.

Myrmi has already basically admitted that no matter what happens, he will blame Obama for anything that goes wrong and give him no credit for anything good that happens..

But if you actually look, the DOW is more or less stable from right after the big decline in October until Jan 20. Then it heads toward the bottom and doesn't look back. That tells me that investors were willing to give him a chance. It's Obama that didn't keep the faith with investors, not the other way around.

Actually, if you've been watching the markets, you notice that DOW had been trending downwards, overall, since April/May of 2008. It plummetted in July 2008, rallied slightly in August, remaining roughly level OVERALL, but with increasing volatility on a day to day basis. It then crashed in October, and briefly rallied quite strongly around the elections - staying roughly level into 2009 until about halfway through February when it started another descent.

Comparing this February to October of last year, this recent descent has been fairly mild - about on a par with last June's.

But don't let actual facts get in the way of a good prejudice, eh?

Actually, if you've been watching the markets, you notice that DOW had been trending downwards, overall, since April/May of 2008. It plummetted in July 2008, rallied slightly in August, remaining roughly level OVERALL, but with increasing volatility on a day to day basis. It then crashed in October, and briefly rallied quite strongly around the elections - staying roughly level into 2009 until about halfway through February when it started another descent.

Comparing this February to October of last year, this recent descent has been fairly mild - about on a par with last June's.

But don't let actual facts get in the way of a good prejudice, eh?

I believe you've said the exact same thing as I. After the crash in October, Obama was effectively the Pres Elect. The markets were fairly stable until he took office. The net loss from October to January was -502. That's a net gain. Net loss from January to yesterday was 2023. That's a couple trillion in wealth. The market has lost as much wealth since Obama has taken office as it did during October when the crash set the stage for his election. (within a hundred billion dollars, or so)
The conclusion remains pretty clearly that investors have no faith in Obama's economic ability. Maybe he should stick to community organizing.

I believe you've said the exact same thing as I. After the crash in October, Obama was effectively the Pres Elect. The markets were fairly stable until he took office. The net loss from October to January was -502. That's a net gain. Net loss from January to yesterday was 2023. That's a couple trillion in wealth. The market has lost as much wealth since Obama has taken office as it did during October when the crash set the stage for his election. (within a hundred billion dollars, or so)
The conclusion remains pretty clearly that investors have no faith in Obama's economic ability. Maybe he should stick to community organizing.

this happens whenever a new party takes power (given this is higher then before). when the republicans took congress and he senate under Clinton the stock markets hit a bump. Change is not very good for reassuring nervous investors. his state of the union speech was a little bit along the lines of I am going to get those evil corporate fat cats. And well the corporate fat cats are the ones who invest. you scare them they are simply going to hide their money in gold.

this happens whenever a new party takes power (given this is higher then before). when the republicans took congress and he senate under Clinton the stock markets hit a bump. Change is not very good for reassuring nervous investors. his state of the union speech was a little bit along the lines of I am going to get those evil corporate fat cats. And well the corporate fat cats are the ones who invest. you scare them they are simply going to hide their money in gold.
Of course, the market went the other way when Reagan took over from Carter... I guess it's a general distrust of Democrats.

Of course, the market went the other way when Reagan took over from Carter... I guess it's a general distrust of Democrats.

actually their was a recession Regan's first year. yeah it started slightly before his term in office began (much like the current pres). The difference was in the speeches. Reagan was about making it easier and cheaper to invest, not about taxing investment more.

And while I personally don't agree with Mr. Obama's polices, I will wait and see where they take us.

actually their was a recession Regan's first year. yeah it started slightly before his term in office began (much like the current pres). The difference was in the speeches. Reagan was about making it easier and cheaper to invest, not about taxing investment more.

And while I personally don't agree with Mr. Obama's polices, I will wait and see where they take us.
You're right. I was looking at the wrong years on the chart. It didn't take long for the DOW to head up afterward, though.

I firmly believe that the market must make corrections from time to time. This really isn't anything different. If the gov't had just stayed home, the market would have recovered at some lower and more realistic value. It may take years to reach that equilibrium with all the monkey business that's going on now.

In Myrmidonisia world, investors are investing directly in their personal confidence towards the person sitting in the White House. Apparently it's not about profit to investors, it's about how charming you feel the President is.

Myrmidonisia is a diehard Republican, who blames the Democrats for every market failure, and blames Obama for the recession, and will just conveniently ignore any argument to the contrary (NL's) so he can 'conclude' what he already firmly (devoutly) believed.

Mmm, very persuasive.

I believe you've said the exact same thing as I. After the crash in October, Obama was effectively the Pres Elect. The markets were fairly stable until he took office. The net loss from October to January was -502. That's a net gain. Net loss from January to yesterday was 2023. That's a couple trillion in wealth. The market has lost as much wealth since Obama has taken office as it did during October when the crash set the stage for his election. (within a hundred billion dollars, or so)
The conclusion remains pretty clearly that investors have no faith in Obama's economic ability. Maybe he should stick to community organizing.

The conclusion is that you have already decided who you are going to blame, and are going to do it regardless of minor inconveniences like 'facts' or 'reality'.

Seriously - read your OWN post if you won't read any others "...after the crash in October, Obama was... the Pres Elect..."

So - there was a honeymoon period of superfeelgood fuzziness in the wake of Obama's victory, that temporarily halted... even slightly reversed the downward trend. The joke is - you see a resumption of that trend... as evidence that Obama was somehow flawed.

Of course, the market went the other way when Reagan took over from Carter... I guess it's a general distrust of Democrats.

The market went UP after Obama was elected, and has 'adjusted' some, now. That's distrust of the Bush regime, if anything.

The market went UP after Obama was elected, and has 'adjusted' some, now. That's distrust of the Bush regime, if anything.
A loss of 2000 points is a pretty serious correction. I still claim that it would have much less, had the government stayed on the sidelines.

At what point will you quit blaming Bush and start blaming the Democrats? 6000? 5500? Does it really have to go lower for you to realize that Obama and his cabinet is clueless on how to 'fix' this recession? Or do we have to learn the lessons of the American '30s, the Japanese '90s, and the Italians (pick a decade) again and watch the stagnation for the next ten years?

A loss of 2000 points is a pretty serious correction.


Do you mean from the artificial peaks we've seen in the last few years, when the stockmarket was bouncing into the atmosphere but suspended by nothing?

No - you mean the sudden drop in the wake of Obama's investiture - where the trend that had stopped, resumed and fell fairly rapidly (but not really any more rapidly than, say, last October) to the level it WOULD have been at, if there hadn't been a goodwill bump.


I still claim that it would have much less, had the government stayed on the sidelines.


That's a lovely opinion.

I think you're wrong. I think that the gestures that have kept (literally) millions of people employed, have slowed the crash, somewhat, and allowed artificial 'levels' at whcih the market can adjust.



At what point will you quit blaming Bush and start blaming the Democrats? 6000? 5500? Does it really have to go lower for you to realize that Obama and his cabinet is clueless on how to 'fix' this recession? Or do we have to learn the lessons of the American '30s, the Japanese '90s, and the Italians (pick a decade) again and watch the stagnation for the next ten years?

I'm going to keep blaming Bush for what he handed over - a recession heading into Depression. Not because he's a Republican, just as I'm not absolving Obama because he's a Democrat.

I'm blaming Bush for what he handed over. I'm blaming Bush for a decade of Democrat-like tax-and-spend politics.... without the 'tax' part. I'm blaming Bush for bankrupting the nation on two ultimately pointless wars.

The lesson of history is, this kind of bottomed-out-market doesn't recover overnight. Even if Obama has done absolutely everything right (and I'm FAR from saying that)... we won't necessarily see REAL improvement for several years. Indeed - if we DO see trends, we must be VERY careful not to invest ourselves in them too strongly, because this market has needed adjustment for a long time - and the unfortunate truth is - if it doesn't adjust now, it'll crash again, just as hard, in another couple of years... and THAT time, it'll be from a lower net level.

You keep saying the Obama administration is clueless - but that is NOTHING but opinion. Obama has made a good point about healthcare and the economy, and how they're linked - and while Republicans are yelling foul about pork, they should actually be listening - we're trying to pull a nation out of recession, which means RE-employment... but no one can AFFORD the packages. If Obama could somehow slash the cost of healthcare by 50%, he'd go a LONG way to fixing this recession/depression.

I'm not blinkered to the faults of either party. Unlike you, I haven't declared partisanship.

A loss of 2000 points is a pretty serious correction. I still claim that it would have much less, had the government stayed on the sidelines.

Maybe. It might have been even more, actually, considering that the government was pouring money into banks that otherwise would have failed, driving stocks down even further.

All the talk about it being a Great Recession can't have helped investors' confidence much either.

nothing is "over" until people stop buying into the lie that everything that isn't makiavelliansim has to be procustianism or worse, and screwing themselves out of any and every real solution to anything by doing so.

A loss of 2000 points is a pretty serious correction. I still claim that it would have much less, had the government stayed on the sidelines.

That's terribly untrue. If the government stayed on the sidelines (as it should), the Dow Jones would probably be at 3000 (as it should be). Dow Jones at 14,000 or Dow Jones at 7,000 is still way too high and reflects hamfisted government efforts at propping up the bubble economy. That's exactly why the market spikes every time there's a rumor of a "bad bank plan" or rate cuts or automaker bailouts or other bureaucratic government interventions aimed at getting Americans to buy more big screen TVs and Buy More Shit in general.

Dow Jones at 7,000 is an unsustainable mirage propped up on government spending, government malinvestments, and monetarist machinations. 7,000 isn't a product of the free market, rather it represents decades of accumulated fiscal toxic waste in the capital structure, ready to collapse at any time.

To truly wash out all the fiscal and monetary garbage of the past 30 years we need for the Bush-Obama cabal to cease their interventionist schemes and allow the Dow Jones to have a proper crash so that the free market can finally capitalize and assert itself.

the problem with stocks today is people invest in stocks for the money they make selling them. In times past people invested in stocks for the dividends.

Speculation and dividends are both healthy reasons for investing in a stock. An equities index would not outperform cash in an actual "free market" though.

An equities index would not outperform cash in an actual "free market" though.

It would - higher risk = higher return. Even in the days of the free market, the Dow Jones Industrial Average outperformed cash.

It would - higher risk = higher return. Even in the days of the free market, the Dow Jones Industrial Average outperformed cash.

No, DJIA only started outperforming cash when the central bank was formed and began its campaign of devaluing the USD.

In a free market the nominal GDP growth rate is the same as the effective rate of return on the weighted sum of risk-free assets and stocks.

If you consider a composite of equities higher risk will also yield higher losses "counterbalancing" higher returns.

http://www.informationarbitrage.com/2009/03/entrenched-managements-yet-one-more-reason-why-tarp-crap.html
Citigroup is up almost 80% over the past few days, while Bank of America has nearly doubled. Each CEO has come out with a bullish statement, Citi to the effect of "We're raking it in" while B of A has defiantly exhorted "We don't need no more stinkin' money." These words helped set off a frantic rally, as market sentiment has, almost overnight, been flipped on its head. Could things have looked more bleak last week? I don't think so. But today's feeling was downright optimistic. Did we get a plethora of new data to cause this reassessment? Not that I saw. Have we seen credit spreads dramatically tighten in line with the equity markets bullish rampage of the past few days? Nope. So what gives? At least as it relates to the financials, the key message is this: TARP has turned big-time CEOs into traders with losing books swinging for the fences. Not exactly what Congress or the Treasury had in mind when they decided to bail out the biggest, most complicated financial institutions. With our money.
I like that line.

I like that line.

Yah but the whole short covering thing for C and BAC is rubbish. C, short interest <4% before this rally. BAC <3%. Compare to AMZN, which didn't collapse, nor saw the same run up.

Credit spreads actually have tightened. They always do at this time of year. And the steep yield curve along with the government saying that they won't allow another LEH means that both these stocks were priced at option levels with the only risk being full nationalization. So people actually bought. Over the long term the belief is that they - absent common being zeroed - are great buys. Money printing machines in other words. That and the suspension of M2M, if it happens quick enough, means that they will be prof. this quarter.

Add that to the potential that CRE will roach the banks that aren't too big to fail, and you are looking at something that could potential be a virtual cartel, and again at option prices with no exp.

It's not a stupid play. (Disgraceful on the part of the gov, of course, but not stupid).