Stock market goes up 10% in one week

[Terral]

Hi David:

Bear market rally. That's all it is. We'll be hovering around 7000 for a while.

By this fall, people will wish for 7000 again, because the market is going south when the people realize The Obama Deception (link) is taking most everybody for a ride . . .

GL,

Terral

 

[Truthmatters]

You believe in far too many nutty ideas to be taken seriously.

 

[Terral]

Hi Truth:

You believe in far too many nutty ideas to be taken seriously.

We will all have a much better view of things by Christmas time. Right? Okay then. By that time we will find out who is really nuts for believing one word out of Obama's mouth cuckoo.

GL,

Terral

 

[DavidS]

Hi David:

Bear market rally. That's all it is. We'll be hovering around 7000 for a while.

By this fall, people will wish for 7000 again, because the market is going south when the people realize The Obama Deception (link) is taking most everybody for a ride . . .

GL,

Terral

I dunno who's more annoying, you or Mickey Mouse...err Masked Maurader.

 

[DiveCon]

You believe in far too many nutty ideas to be taken seriously.

then again, so do you

 

[DiveCon]

Hi David:

Bear market rally. That's all it is. We'll be hovering around 7000 for a while.

By this fall, people will wish for 7000 again, because the market is going south when the people realize The Obama Deception (link) is taking most everybody for a ride . . .

GL,

Terral

I dunno who's more annoying, you or Mickey Mouse...err Masked Maurader.

considering some of your posts, i would have to put you on that list

 

[Toro]

The market went up hard because we were extremely oversold and there was finally some good news.

This is an unwinding of a massive investment bubble. It has little to do with Obama, or Bush for that matter. People who make it about politics are clueless.

That said, the market has been very unimpressed by Obama and Geithner. There is a belief that Obama is hostile to business and has his head in the sand while Geithner is a ditherer who is doing nothing or has little idea how to fix the banks. This has lead to buyers stepping aside and letting the market fall. It went down 30% since Geithner's press conference to announce his plans to fix the system, whereby he announced he didn't really have any, or at least any specifics.

The market rose for three reasons. First, it was announced that the SEC may reconsider the uptick rule. The uptick rule is one that allows shorting only when a stock ticks up. This is more psychological and will have little effect on the actual machinations of shorting or the market, so in reality, it has little effect.

The second reason why we rose was because the SEC will look at revising mark-to-market, where financial firms have to mark their assets to the value in the market. This is far more significant, as mark-to-market as contributed to the downward spiral in financial stocks, making it almost impossible for many of them to raise share capital without destroying their equity. This is important.

Finally, and by far the most important, was the news that Citigroup, Bank of America and JP Morgan made money in the first two months of the year. This is critically important. The market has been selling off in part because of fears of a financial melt-down. If there is belief that the financial system is repairing itself - which I believe it is - then there will be a powerful counter-trend rally.

This is very, very important. If investors believe that the financial system is on the road to repair, then this becomes about the economy only. We know how to fix the economy.

We may have seen the bottom. However, the most likely scenario is a rally then the market rolling over and re-testing the lows. My guess is that the re-test occurs sometime in late summer or the fall. If the market re-tests over the next month and holds, then the bottom is likely in.

For those who make this about politics, the market will do much better under Obama than it did under Bush, simply because stocks are dirt cheap right now. So keep making that argument only if you want to look stupid in four years.

 

[elvis]

why does GM still have a strong-sell rating?

 

[Toro]

why does GM still have a strong-sell rating?

By whom?

The reason is because the equity will eventually be wiped out. It is going to zero, unless the unions agree to cut their pay by 40%.

It's very easy to see this end-game.

Chrysler is gone also. Maybe Ford, too.

 

[elvis]

why does GM still have a strong-sell rating?

By whom?

The reason is because the equity will eventually be wiped out. It is going to zero, unless the unions agree to cut their pay by 40%.

It's very easy to see this end-game.

Chrysler is gone also. Maybe Ford, too.

I am sorry, I can't recall who. The sight I looked at rated it as 2/10 after it had more than doubled in value since march 6 (52 week low). I cannot imagine the govt allowing GM to fold. Help me understand this. thank you.

 

[Toro]

I am sorry, I can't recall who. The sight I looked at rated it as 2/10 after it had more than doubled in value since march 6 (52 week low). I cannot imagine the govt allowing GM to fold. Help me understand this. thank you.

All three automakers will continue to operate, even if they all go bankrupt. However, they will be smaller and the wages and benefits will be less. The equity will be wiped out through the bankruptcy process and eventually, the bond holders will own the companies.

It is a simple proposition - the cost structures of the Big Three are too high, there is too much capacity in the world, and though quality has been rising, it still lags Japanese competitors and thus American car makers continue to lose share.

The companies are run for the benefit of the employees. That has to end for the companies to be viable long-term. The government pouring money into the industry and not requiring significant structural reform is just throwing money down a well.

 

[driveby]

You believe in far too many nutty ideas to be taken seriously.

oh no you didn't ....

 

[xsited1]

You believe in far too many nutty ideas to be taken seriously.