Markets Bounce Back

Tuesday, September 30, 2008

Despite the gloom and doom efforts by the Bush administration to frighten Americans into thinking the sky would fall if the House failed to approve his $700 billion dollar bailout of Wall Street criminals, U.S. stock indexes opened high, suggesting Monday’s sell off was an overreaction. 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.

In fact, Wall Street snapped back Tuesday after closing down 777 points yesterday, to close Tuesday up 485 points — nearly erasing yesterday’s loses as the market attracted millions of bargain hunters.

Although credit remain tight, there were a number of bright spots:

• The Standard & Poor’s 500 recovered 58.34 or 5.27 percent
• The Nasdaq composite index rose 98.60, or 4.97 percent
• The blue-chip index rose nearly 500 points by late Tuesday afternoon
• The yield on the 3-month Treasury bill rose Tuesday to 0.89 percent
• The yield on 10-year Treasury note rose to 3.83 percent
• An uptick in Inter bank lending increased although at a slightly high interest rate
• Ireland agreed to guarantee bank deposits to improve banks’ access to international funds
• The U.S. dollar jumped 1 percent against the yen
• The Euro fell to $1.4416 making travel to Europe more affordable for Americans

Although I am diametrically opposed to the $700 billion dollar bailout of Wall Street criminals, I agree completely with Sen. Barack Obama, who today proposed raising the Federal deposit insurance (FDIC) limit to $250,000 in an effort to help restore wavering public confidence in the American financial system. The FDIC was created by the Glass-Steagall Act of 1933 which guarantees the safety of checking and savings deposits in member banks up to $100,000 — an amount considered by many to be far too low.

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15 Responses to Markets Bounce Back

  1. Adirondacky says:

    I think I would’ve been more open to the bailout had Bush and his economic goons not tried to ram it down the country’s throats with scare tactics. You see, we’ve been there, done that, with the Iraq war invasion and the scare tactics of mushroom clouds over U.S. cities. We’ve learned the hard way never to trust this administration.

  2. emcee says:

    Man, there are folks scared the water won’t work and the lights ain’t gonna’ come on. You can’t reason with them. This is the worst kind of scare tactics.

    If Bush and the Democrats wanted support then, why come they wouldn’t hold a press conference in Prime Time to lay it all out?

    People ain’t stupid. Just talk.

  3. Bill Perdue says:

    The bailout in any form is a crock, and any party that supports it will soon be extinct.

    “A crap sandwich.”

    So says House Minority Leader John Boehner (R-OH describing the $700 billion bailout he supports but fears at the same time. He’s pissed because he knows his party is going down in flames in November but he hasn’t yet figured out that that’s exactly what’s in store for the winners too.

    It doesn’t matter when or even if the bailout passes. The damage has already been done and the economy is in failure mode.

    According to the US Treasury the national debt is exactly $9,889,199,531,449.08 (as of yesterday). That’s almost $10 trillion dollars and it increased by about $700 billion dollars this year because of the US war to steal oil. By the end of the year it’ll be in the vicinity of $2.5 trillion dollars higher. The math is as simple as the consequences will be catastrophic.

    Each year the Clinton/Bush genocide goes on costs about $500 billion dollars. This weekend the Congress loaned $25 billion dollars to Ford, GM and Chrysler, but the amount was almost too piddling to be noticed. Add an absolute minimum of $1 trillion dollars for the big bailout, another $1 trillion for Fannie Mae and Freddie Mac (with out of pocket losses adding about $200 billion dollars), and $85 billion dollars for AIG. Add substantial amounts for losses and for inflation and pretty soon you’re talking real money.

    For a year of two the left has used the term ‘looming economic crisis” but now we’ll have to stop; it’s here. Sooner or later the economy will be crushed under the weight of that debt. .

    As the crisis continues the left will be organizing to compel the government to renounce the debt, immediately end the genocide, nationalize failed business without compensation under democratic control and use the money for social programs, to improve the infrastructure and begin a crash program to deal with the effects of the looming environmental crisis created by the unchecked degradation of programs like NAFTA and Bush’s withdrawal from the Kyoto Treaty.

    “May you live in interesting times” is an ancient curse. Now it’s official: we live in interesting times. Those times are going to politically destroy McCain and Obama and their parties.

  4. Peace Nick says:

    I watched yesterday’s events with amazement.

    For starters, I don’t have any money, so what I don’t have I can’t lose.

    My condo mortgage is fixed at 5.85% for 30 years, so my payment is always the same.

    If Bush, Cheney, Bernanke, Paulson and Pelosi says we have to do something, I’ve learned from experience to run, don’t walk the other way as fast as my feet will carry me.

  5. feminazi says:

    I’ve been around a longtime and this much I can tell you. Prior to a General Election, there is usually some amount of financial turmoil in the markets. The markets don’t like uncertainty. I predict the day after Obama wins on Nov. 4th, the DOW and the NASDAQ will take off. I could be wrong but this is what usually happens.

  6. DCVET says:

    Had the Bush bailout been approved, the debt ceiling was slated to be increased to $11.5 trillion. An amount equal to $40,000 per every man, woman and child in this country and an amount that would never be paid off. I told my wife, if the bailout goes through, expect a huge devaluation in the dollar.

  7. retahyajyajav says:

    U.S. banks and S&Ls are sitting on $7 trillion in bad mortgage paper. Even if the Feds wanted to they don’t have enough in the Treasury to purchase this debt to take it off the books.

    The system is sick and I think it’s going to need to fail before it gets better.

  8. Fran says:

    I don’t have any idea as to what is the best way to fix this mess, all I do know is “the Decider” has royally fucked up, once gain.

  9. Travelingman says:

    Maybe all of this is just too much for my pea brain to comprehend. Maybe I should have paid more attention in econ in college. All I know is that if the stock market does not stabilize we are in for real trouble. Yes I blame deregulation for much of this and greedy Wall Street guru’s. That said somehow we have to get things stablized. What concerns me is that we live in a credit society. I am not sure if most people realize this or not but if all of the banks are short on cash and there is a run on banks because we cannot use credit cards it will make the great depression look like a cake walk.

    Wachovia, the second largest bank in Charlotte failed yesterday. Until then we were the #2 banking city in the country behind NYC. Now that all changes. Wachovia is the second highest employer in the City, if not the first.

    While we may all be loathe to the idea of a bailout, Wall Street is affecting my city right here on Mainstreet USA. That my folks is something that we can all relate to.

  10. Randy Arroyo says:

    Charlotte, NC has B of A and Wachovia. Both are big banks and employ a lot of people. I think I would have felt better about dropping $700 billion more debt on my shoulders if I knew the money would slow unemployment and help mortgage borrowers locked into freaky loans. But Henry Paulson never said a word about unemployment and bad mortgage loans. He’s a former Wall Street CEO and his focus is Wall Street. Not Main Street.

  11. damned if we do
    damned if we dont

    what is worse is that i really dont think bush, paulson and bernanke really gave as much thought behind this as we think they have. they want to save wall st.

  12. Woodcliffe says:

    The sky isn’t falling and another Depression isn’t around the bend.

    When I saw a an angry and frustrated Bush come to the podium yesterday and to demand Congress act on his bailout request, I realized this plan had nothing to do with Main Street. It was all about helping his supporters on Wall Street.

    I just want him gone. I’m so sick of Bush and the GOP.

  13. Bill Hussein O'Reilly says:

    No bailout. No, No, No.

    This country keeps propping up companies have no business being companies. We should have a plan to revive the financial markets, but it should not involve having the government take over companies.

    Government should continue to work behind the scenes to encourage the stronger financial institutions to take the weak companies out of the field. Let free market forces blow the nonperformers away.

  14. libhomo says:

    I noticed how the corporate media downplayed it. They just love the idea of us flushing tax money down the Wall St. toilet.

  15. Maggie says:

    Well yah, but the Senate only stipulated that FDIC was to be increased for a limited amount of time, and then suject to approval again, this is horseshit. You know how these guys operate.

    Here, Mike Moore has some good ideas:

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