The sky is falling!!! "Stocks JUMP After Biggest Sell off in Years"

[autorank]

Memo to the Corporate Elite: You never imagined that your greatest scheme would fail.

Aren't the people suckers, you said to each other. We'll take them down for everything.

But then the sky didn't fall, the wolf didn't appear.
http://www.msnbc.msn.com/id/3683270/

Your lies and scare tactics have ended. The people said no and made that no a reality.

Thanks to all of us, this great rip off - "Grand Theft America" - was prevented.

[wtmusic]

1. Most analysts don't believe we've seen a bottom yet

Yesterday broke through technical support so it's likely that we won't be setting any records soon. But the rebound is a sign of confidence.

[RainDog]

11. I expected the market decline long before this mess

and have made plans accordingly. Whether the bail out as presented yesterday, or any other bail out occurs, I still expect a mkt downturn beyond what we have currently seen.

real estate prices will also, imo, continue correcting downward for terribly overinflated markets - no matter what.

Of course, I may be wrong, but I am basing my plans for my life on the belief that we will face a recession no matter what because that is the result of the Bush economy.

[TexasObserver]

49. The chart for the DOW the past 12-14 months tells the story.

We are in a major decline, just like we all knew. But now, they're trying to convince us that this one is really, really worse than the downturn of the late 80s, IF we don't fork over the blank check to Bush's hack.

I don't know how any intelligent observer of the markets would conclude anything other than "this market is headed to 10K or less."

When it drops from 14K, to 13K, to 12K, to 11K, you don't need a sign from God to know it's on its way down. These hurricanes mean huge demands on insurers. The markets are overleveraged, and the biggest companies are among the worst offenders.

In every downturn, the companies that have been inefficient get eaten by the wolves and shit over a cliff. That's how it goes for those whose fundamental business plans are bad. They didn't plan well, they risked too much, and now Bruno and Rocko want their money. Failure is earned, just like success. Let it happen.

There's a bailout plan available to these companies. It's called Chapter 11.

[loudsue]

32. It's not so much a sign of confidence, as it was a ponzi scheme to begin with.

I said in a post yesterday that there was going to be a really good buying opportunity for the market after yesterday's drop. I think it will bounce around some more, and the next couple of weeks will see some serious shaking out.

But by Halloween??? Every goblin you know will be ready to get into the market.

[autorank]

47. Here's what was in the bill defeated - 100 pages of weasel words

I read the whole thing. There was more wrong with it than this but this jumped out. What a confidence killer - the people get screwed again. There should be some rational approach to this but this bill was hardly that:

Concerns about Proposed Bailout Bill
The original bailout proposed by the White House gave the Secretary of the Treasury unlimited discretion in doling out $700 billion and barred any Congressional or judicial review. The new legislation calls for "consultation" with the following entities. Please note that not one of those to be consulted is an elected official and that Congress is out of the loop.

"(b) CONSULTATION.—In exercising the authority under this section, the Secretary shall consult with the Board of Governors of the Federal Reserve System, the Corporation, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, and the Secretary of Housing and Urban Development." Title I, Sec 101, (b) "Consultation" page 7, lines 18-23 and pages 15, lines 23-24, and page 16, lines 1-9.

The people get involved in the decision making process, presuming Congress is listening. Sec.115. Graduated Authorization to Purchase (pages 40 - 49) provides an option to overrule any particular bailout. Congress has 15 days after a purchase notice by Treasury to introduce a joint resolution disapproving of the bill. The resolution has a tight window to passage, three days, and is subject to a presidential veto. The "fast track" aspects of this guarantee the same types of hurried votes characterized by a majority of members failing to even read a proposed bill (e.g., The Patriot Act).

The bill requires that the Secretary of the Treasury report to Congress no more than seven days after a commitment to purchase a failed financial institution or at $50 billion dollar disbursement intervals. Title 1, Sec. 105, Reports, (b) Tranche Reports to Congress, (b) Timing, page 19, lines 7-24 and page 20, lines 1-10. The only direct option Congress has is the above mentioned "Joint Resolution of Disapproval."

The bill addresses overpayment for troubled firms with the intent of preventing "unjust enrichment." This is done "by preventing the sale of a troubled asset to the Secretary at a higher price than what the seller paid to purchase the asset." Title I, Sec 101, (e) Unjust Enrichment, page 9, lines 15-18.

What if the price the seller paid for the asset was an inflated home price in a down real estate market at the time of a bailout? By paying higher than market value prices, not limited by the bill, "enrichment" would be guaranteed.

Even if that there were a real prohibition that failed firms not make out under this bill, there is an open gate to enrichment, firms in "conservatorship or receivership."

"This subsection does not apply to troubled assets acquired in a merger or acquisition, or a purchase of as sets from a financial institution in conservatorship or receivership, or that has initiated bankruptcy proceedings under title 11, United States Code." Title I, Sec 101, (d), page 9, lines 18-23.

Thus, there can be what would be considered "unjust enrichment" if a firm just declares Chapter 11 bankruptcy.

How long will it be before people compare this generous bankruptcy provision for billion dollar firms with the draconian bankruptcy reform bill passed by Congress in 2005?
http://www.scoop.co.nz/stories/HL0809/S00376.htm

[lapfog_1]

2. You know it was over a year between stock market crash

of 1929 and bread lines, right?

And even the market crash then (which had much less control than now) didn't happen in just one day.

[Hardrada]

10. But we won't have a Hoover in place who would not do really

what is needed. We just need to get to next February. Stopping the war will help a lot of the money drain.

[SteelPenguin]

14. Things actually got better!

in 1930 the market got back up to early 1929 levels, though not September 1929 levels, credit was available, and interest rates low. Things tanked though and didn't reach bottom till March 1933. Three and a half years after the crash itself.

We're in for a long hard road. How hard and long is still up in the air.

[autorank]

44. If I were psychic, I'd tell you about 12 months out. There's a problem, this isn't the fix

They're afraid to even hold a few days of hearings, to get the 200 economists a chance to speak out, the ones who oppose this, to let small business people who hate this come forward and speak, to examine Paulson's favored treatment of his old firm, Goldman, by bailing out AIG which owed Goldman $20 billion.

It's a scam. One thing for sure, what Bush proposes and Congress passes without hearings or real debate is assuredly an insider deal. We will not benefit.

[ThomWV]

3. They have not "bounced back" - they have not even regained half of what they lost yesterday

That is not a rebound, it is a rebound when they regain what they have lost, not when they have come back up what they lost yesterday in less than 10 minutes.

[RaleighNCDUer]

29. And it would be stupid to expect them to. That's what 'correction' means. nt

[texastoast]

4. Oh, that's right

The sky is falling! The sky is falling!

Oh, wait. No it isn't.

;-)

[Breeze54]

5. It's just a 'fire sale'... bargain basement prices.....

we all are not out of the woods yet though. I was glad to hear that the DOW went up 270+ points by noon today. Chicken Little wasn't completely right after all but it IS beginning to rain on Main St. and we don't need more people out of work right now. Congress still needs to take action.

[whistle]

6. So why did Wall Street need a $700 billion bailout? Maybe it is a rescue

...but from what? $700 billion to line the pockets of Bush, Cheney, Paulson, Bernancke and McCain to use to rescue their own bank accounts and stock trade gambles, hum-mm, eh?

[Karenina]

34. The Fed dumped 630B into "liquidity" BEFORE the vote.

Explain to me again what the additional 700B was for...

[SteelPenguin]

7. did you even read that article?

"The rise in stocks wasn't unexpected as carnage on Wall Street often attracts bargain hunters, though questions remain about how investors will proceed. Without a bailout plan in place to absorb soured mortgage debt and other bad loans from banks' balance sheets, investors are wondering what might restore confidence in lending."

"Major stock indexes were almost a sideshow during the session, with the credit markets as the main event. A key rate that banks charge to lend to one another shot higher, a tightening of the availability of credit that could cascade through the economy."

"Though the blue-chip index rose more than 250 points at midday, the main worry for traders is that a lack of a plan will make it nearly impossible for some companies to fund basic operations like making payroll. Participants in the credit market buy and sell debt that companies use to finance operations."


Just wait...

[chupacabranation]

19. I know.

I work for a small business and I can guarantee there'll be a day when I'm not paid.

There is definitely some looney-tunes optimism going around.

I wish I could have what they're having.

[SteelPenguin]

30. I own a small business

It's definately a worry. We've never had to resort to paying payroll on our credit line, but if other companies default on their debt to us, or just take a long time to pay we'd need to. If we're not paid the money we're owed by other companies this month, we would need that line of credit to make payroll at the end of October. The key word in all this is cascade. One company can't pay it's debts, and it cascades down the line till millions of people lose their eyes in a heartbeat.

Ever watch that show Kitchen Nightmares? most of those troubled restaurants are in debt. A quarter million, a half a million. Lose that credit and all those close. Sure some are risky businesses that SHOULD fail, but there are plenty of small businesses that are sound, but their health and the health of bad businesses are all intertwined, and many healthy small businesses for their starting periods RELY on that credit to get off the ground.

That dries up, cascades down, we're looking at serious serious problems. People need to stop looking at what the DOW is doing and focus on the actual issue here.

[chupacabranation]

33. Agreed.

I think there's so much of a focus on 'making people get their come-uppance' that they don't realize theirs is coming with the quickness.

Just goes to show that people enjoy 'trouncing' whatever imagined opponent over a reasoned review of the actual contingencies...

[Marrah_G]

53. People just aren't getting it

My boss is in the same position as you are.

People are angry at wall street and refuse to even listen. They just want "them to pay".

The reality is that in the long run we, as taxpayers, stand to see a profit from this buyout, yet if we do nothing, many businesses will close for good.

[autorank]

38. I read the article and I read the bill, in some detail

From the article: "At the close, the Dow rose 485.21, or 4.68 percent, to 10,850.66 after falling nearly 7 percent on Monday to its lowest close in nearly three years. It was the largest point drop and 17th largest percentage drop in the blue chip index. The percentage decline was far less severe than the 20-plus-percent drops seen in the stock market crash of October 1987 and before the Great Depression."

Tight credit is a problem. That doesn't mean you give a bunch of failures $700 billion at the discretion of the Secretary of the Treasury.

Paulson was CEO of Goldman. AIG owed Goldman $20 billion. Paulson bailed out AIG. The NYT elaborated: "there was also a separate meeting on Monday (Sept. 15) to discuss financial aid for A.I.G. Lloyd C. Blankfein, the chief executive of Goldman Sachs, was the only Wall Street chief executive who attended the Monday meeting."

"As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.

"One of the Wall Street chief executives participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.

"Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said." http://www.nytimes.com/2008/09/28/business/28melt.html?_r=2&hp&oref=slogin&oref=slogin

You think these folks are out to help you?

[SteelPenguin]

50. By quoting the Dow you're showing you don't get it

Looking at the Dow in this situation is like talking about the wind, without considering the hurricane.

To answer your question, no. I don't think they're out there to help me. I think they're out there to help themselves. That doesn't mean that their interests and mine (and yours) can't align.

Hopefully we'll see action this week, but every week we don't have a solution more banks are gonna drop, and less credit will be available till small businesses start closing across the country. The Wall Street / Main Street thing is accurate. If we don't give Wall Street money, then you're going to start seeing 'closed' signs alot more on Main Street.

[Subdivisions]

8. Within 10 minutes of close yesterday, the DOW dropped over 400 points. n/t

[Ellipsis]

9. Some day traders gotta be diggin' this.

These huge swings can make a day trader some big bucks.

[autorank]

39. And good for them.

That's intense work - even for those math people.

[earth mom]

12. Back to gambling as usual.

:grr:

[NoSheep]

46. Legalized gambling. But now we know it's with our money.

[Cleita]

13. My opinion is that the markets will rebound when we have

an acceptable bailout plan. The lesson to be learned here is not to rush into a hasty plan because of the fear mongering. We need to take our time to come up with a plan that is a cure, not a band aid, and when that happens the markets will come back up.

[Ichingcarpenter]

15. Infusion of Massive Federal& European Loans to banks didn't hurt either

Pay Attention!

[Just Visiting]

18. Um, that did nothing to ease the credit crunch

Infusions of pretend money never do. Nothing is in place to ease the massive debt burden U.S. households are under.

700B. 3T. Don't mean shit.

This is all smoke and mirror trading now until there is a resolution.

China.

Dollar swapping.

Pay attention! :)

[Ichingcarpenter]

25. It temporarily pimps the market for a day! Welcome to DU but

you didn't understand my post. I have been recording the loans
and the results on the market since August of 2007 when they started.

Smoke and mirrors.

[HughMoran]

16. One day here, one day there does not a trend make

This is not the way we look at our future - the next big bank failure could rupture the economy.

[ihavenobias]

17. I hope you're right n/t

[tjwash]

20. They profit from selling the stock yesterday, and then turn around and buy it back at a bargain.

So have got to profit twice from their seedy manipulations.

This is a failure for the Corporate Elite how again?

[seemslikeadream]

21. Ain't that somethin'?

:hi:


quel surprise!

[SIMPLYB1980]

22. It's not over yet. If the rescue doesn't pass I hope I have to eat crow,

but if it doesn't I fear I may have to eat crow to survive.

[autorank]

41. We're not deer looking in the headlights anymore

The rejection of this lousy bill is a watershed for public efforts. It was across the board, not left or right, just pissed off people having heard enough lies. Remember the Patriot Act - passed in a crisis. Other acts as well.

Congress can have some hearings for a change, also examine Paulson's behavior helping the firm he formerly headed as CEO by bailing out AIG, which owed his former firm, Goldman Sachs, $20 billion.

Amazing stuff.

http://www.scoop.co.nz/stories/HL0809/S00376.htm

[formercia]

23. Surprise, surprise!

as Gomer Pyle used to say.

:rofl:

[Marrah_G]

24. It went down 777 yesterday..Now it has gained back 333.

That leaves us still down 444 since yesterday morning.

Your huge bounce is not even half a recovery...............

[autorank]

37. It's listred as a "JUMP" but what difference - they wenet down

Largest point gains for Dow

#3 all time:

Sept. 30, 2008---10,850.66---485.21

That's not half bad considering the poisoned by those who would benefit from the bailout.

There is corrective action needed but not the type that's rushed. This is Patriot Act legislation,
rush through it and just shove it down our throats.

I read the bill in detail and it stunk, everything for them, little to nothing for the people.

It looked good until you read it closely then it stunk up the place.

They need to take their time and do it right. Henry Paulson does not get to become the finance
guy for all of us.

In fact he should resign, considering that he did the Goldman deal with the Goldman CEO in the room
(NYT story).

[scheming daemons]

26. The. crisis. is. not. about. the. stock. market.

The stock market fluctuations are a symptom, not a cause.


The credit freeze is the crisis. That is what must be solved.


What the Dow is at during any particular period is immaterial.

[Realityhack]

27. It is not fair to confuse people with facts. n/t

[SteelPenguin]

31. You've been posting really well

Keep it up. People just don't understand what's going on and it's good to keep hammering home that the real problem is in credit and commercial paper.

[depakid]

40. Some of the posters remind me of the anti-vaccination crusaders

No matter what evidence you show them that vaccines are safe, efective and necessary- they persist in irrational beliefs and conspiracy theories.

Indeed, presenting them with credible and relevant information only seems to make them dig in that much deeper.

[PVnRT]

54. One flamewar per thread, please

Let's not attract them out of their dungeon.

[autorank]

43. Who said it was the crisis - as a symptom, it's not behaving according to BushCo logic

We were led to believe that this was doomsday. The market would have reflected that. It wasn't.

On credit, here's what business folks are saying, particularly the person from AMS:

"The way the bailout has been sold to the general population, including small businesses, is that you are going to perish if you don't get this through and your credit is going to dry up overnight," said George Cloutier, who is founder and chairman of American Management Services, which consults for small businesses. "We talk to . . . small business owners on the phone every day. And I think the most important thing that we are hearing is they hate the concept of the bailout. They feel that Wall Street is being given a free ride." http://www.washingtonpost.com/wp-dyn/content/article/2008/09/30/AR2008093002922.html?hpid%3Dtopnews&sub=AR

We're all facing punishment as a result of the errors of the people who created the crisis but they get $700 billion. It makes no sense.

[Poseidan]

28. the problem... ?

Is lending the entire problem? If so, couldn't the government itself simply provide loans and credit? Interest makes it so eventually, the tax-payers funding the system would turn a profit (meaning, taxes would be lower).

[autorank]

42. It's the problem that screws the middle class, small/medium sized business

So why not make credit available? It would mean they might have to hold hearings and it might then
mean that they can't dole out $700 billion in corporate welfare. That's where it's at.

Lets see who gave to those who voted yes. It's out there but I don't have the link. Your guess is
probably correct.

:)

[moodforaday]

35. You know what this reminds me of?

I'm not much of an anthropologist, but somewhere in the collective consciousness gleaned from history books and the Discovery channel, there's the idea of a village magus, sorcerer or later a high priest, who would chastise his people (they were typically males, weren't they?) and demand all sorts of offerings and sacrifices under penalty of gods' wrath. And people gave, because they were frightened. And after they gave, the earth did not shake, the rain did not fall for three years straight, the volcano stayed dormant, and the lightning did not incinerate the village. And the people thought: It works! And the next time they brought even more offerings and made harsher sacrifices to appease the frightful powers. And the offerings worked again. And so it went.

How are CDOs and MBS-es, futures and derivatives different from high magic of the bygone time? From where I stand, they aren't. Unknown, powerful forces deal with them, and there is no telling what consequences may befall us.

Sometimes you just have to call their bluff.

[Snazzy]

48. that's spot on

(like many have said, wish you could rec an individual post.)

Oooga-booga!

Supreme court must select shrub or our country is doomed. DON'T THINK, ACT!

Oooga-booga!

We must abandon most protections from being a police state (part 1) or the terrorists have won. DON'T THINK, ACT!

Oooga-booga!

We must attack Iraq before they can attack us. DON'T THINK, ACT!

Oooga-booga!

We must abandon most protections from being a police state (Part 2) and protect the corporations who violated the laws we forgot to rescind in part 1. DON'T THINK, ACT!

Oooga-booga!

There's some stuff we would like to steal before we get thrown out on on assess in November. Gimmee. DON'T THINK, ACT!

-------

Now we wake up a bit, eh, 33 days to go.

[OwnedByFerrets]

36. I'm afraid you have spoken too soon.....breaking news is that

they will be voting on the bill again tomorrow.

[johnaries]

45. The irony is that Republicans used to send me this same caption.

I have been a member of DU since 2004 because "I thought" we did better research and were more informed.

And Autorank, I always respected you as one of those who did their homework.

In this case, You did not. I am very disappointed.

Let me repeat I AM VERY DISAPPOINTED.

Autorank, you of all people need to do some research. All is NOT what it seems. Do some research. I know you know how to research, because you have proven it time and time again. Drop your bias and preconceptions, and look at this issue logically.

Then get back to us. Ok?

[Marrah_G]

51. Your jump was no real jump- if was a half hearted adjustment

It went down 777 then up 485. Still a 292 loss. No small loss.

Now it is down another 180.

Where it will end tonight, no one knows.

[El Pinko]

52. Dead cat bounce. NT

NT