NEW YORK (MarketWatch) -- U.S. stocks on Friday rallied on a report President-elect Barack Obama would nominate Timothy Geithner to be the nation's Treasury secretary.
"The market's message is Geithner is a good choice. He's young, he's intelligent and he's experienced. What this country needs are people who are young, full of energy, and can put in 26-hour days. There's nothing like leverage," said Hugh Johnson, chairman of Johnson Illington Advisors
Any reason could have driven the market today. I think it's just a technical bounce. Or, maybe a sustained rally? Just how much is factored in will be disclosed later...US looking for any excuse to have a rally. Timothy Geithner is the messiah, the reason for the rally, the reason the market turned, the reason again all other poor data overlooked. This guy must be good because he works 26 hour days. He has also been beside Ben Bernanke throughout the crisis-wow. Genuine rally?
Any reason could have driven the market today. I think it's just a technical bounce. Or, maybe a sustained rally? Just how much is factored in will be disclosed later...
Investors fled stocks and moved back into dollars throughout the trading day yesterday, rallying the dollar index back to the highest level since April 2006. We moved above 88 on the dollar index a week ago, but it was unable to maintain the higher level.
The same thing occurred last night, as equity markets in Asia rebounded, bringing the dollar index back below the 88 handle. Apparently there was speculation that a sale of Citigroup Inc. will reduce risk in the financial system, slightly increasing the confidence of investors. This is how perverse these markets have become; the possible sale of one of the largest financial firms in the US actually rallies the markets.
Any reason could have driven the market today. I think it's just a technical bounce. Or, maybe a sustained rally? Just how much is factored in will be disclosed later...
The Real Great Depression
By SCOTT REYNOLDS NELSON
While many commentators on the recent mortgage and banking crisis have drawn parallels to the Great Depression of 1929, that comparison is not particularly apt. Two years ago, I began research on the Panic of 1873, an event of some interest to my colleagues in American business and labor history but probably unknown to everyone else. But as I turn the crank on the microfilm reader, I have been hearing weird echoes of recent events.
http://chronicle.com/temp/reprint.php?id=477k3d8mh2wmtpc4b6h07p4hy9z83x18
And the market rallied 6.54% on-
...There's nothing like leverage," said Hugh Johnson, chairman of Johnson Illington Advisors
Hey IFocus, that is a VERY interesting read! The points of note that stood out to me were;
1. the fact that it was US industry taking over Europe then, and now it's China taking over the US
2. The post-panic winners, even after the bailout, might be those firms ”” financial and otherwise ”” that have substantial cash reserves.
aye its done wonders for the global financial system.
Citi's common stock is now worth less than the government pumped into the company last month. (On the bright side, if the government hadn't pumped in the money, it would now be worth zero). The company's tangible book to equity ratio is now more than 50-to-1, and the firm's gigantic mountain of consumer debt "assets" will almost certainly face enough writedowns in the next several quarters to wipe out the equity that's left
http://clusterstock.alleyinsider.com/2008/11/citigroup-finally-panicsWhatever happens, Citigroup won't declare bankruptcy. Before that happens, Hank Paulson will take it over, just as he did Fannie and Freddie. He will then chop it up and start selling off the pieces to try to recoup some of the $2 trillion that taxpayers will be on the hook for.
Citi's debtholders will probably be kept whole in that scenario (Hank won't risk another Lehman). Citi's preferred shareholders will probably get hit but not vaporized. Citi's common shareholders, meanwhile, will probably get wiped out.
Citi's in serious trouble and "too big to fall."
QUOTE]
No one is too big to fall anymore. Pundits I read used to say "we live in interesting times" now we see comments as "we live in atonishing times"
This is starting to be a regular event on Friday after the market closes in the US.
Is there a trend developing here?
The trend continues with another 3 US bank failures on Friday.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?