Media Bears Routed — At Least Today
Armageddon averted:
NEW YORK (AP) — Wall Street pulled off a stunning comeback Wednesday, surging higher in late trading and wiping out what looked to be yet another precipitous decline. The Dow Jones industrials, down more than 323 points in earlier trading, ended the day with an advance of just under 300 points, according to preliminary calculations.
As to other indices, the S&P 500 ended up 28; NASDAQ advanced 24, and, unlike the other two majors, is still down for the week.
Makes sense (markets tend to do that, eventually). Now that the Fed gave the Cramers of the world their candy, there have been too many good earnings reports to ignore. Tech is struggling a bit because the likes of Apple and Ebay have issued conservative guidance on their 2008 results — probably because, as Zogby has documented, consumers have largely been convinced by the naysayers into thinking that the sky is falling. Years of non-stop negativity will do that.
But for now, media vultures ready to pounce on a market crash to go along with their non-existent-as-of-yet recession are just going to have to wait a bit. Awwww.
whistling your way through the graveyard is not the solution to a very, very serious world-wide financial crisis.
Comment by BillT — January 24, 2008 @ 9:24 am
Well I guess that now the MSM can tell us that everything is A-OK on Wall Street.
Most Americans know that the economy is struggling badly and are afraid.
Comment by John Ryan — January 24, 2008 @ 9:51 am
Fantastic! Unscrupulous and under-regulated bond issuers clean up on such a grand scale that the entire economy is threatened unless big daddy government bails then out. Now watch them double their money on said government bailout (i.e. our tax dollars). I love free-market capitalism. We should try it sometime.
Comment by Dave — January 24, 2008 @ 10:18 am
And what will happen when Bernanke has no more interest rate options like he used to save the market tuesday? 3 1/2 points to go and he will start having to pay people to take our currency!
Comment by madmatt — January 24, 2008 @ 10:43 am
#4, Bernanke is still 2.5 points above Greenspan’s low. Were you complaining then?
#3, Richly deserved multibillion-dollar writedowns aren’t exactly synonymous with “cleaning up.”
#2, Unemployment is at 5%; pretty sure that’s below the Clinton-Era average. I just heard that initial claims for unemployment bennies dropped for the third straight week. The fear is media- and politician-induced, and after three years, it’s finally working. Congrats to all those trying to talk things down. You’re almost there.
#1, This isn’t even a bear market yet, let alone a crisis. Banks are having well-deserved problems. Worldwide GDP growth is still fine.
Comment by TBlumer — January 24, 2008 @ 11:01 am
You don’t know much about the market, do you? That rally was the short-sellers, covering their, er, shorts. My husband’s a former day trader, and he’s always very amused by people who try to read long term trends from hour-to-hour fluctuations. We aren’t headed FOR a recession, we’re IN one, and anyone who knows the market recognizes it. This doesn’t make me happy, since liberals also need to buy food and make mortgage payments, but it is nice to know that George Bush will leave office not only with the mark of Cain for tens of thousands of deaths in Iraq, but with “worse recession since 1929″ indelibly stamped on his pitiful legacy.
Comment by T-Rex — January 24, 2008 @ 11:24 am
Not to worry folks, it’s all apart of the plan by the Dems and their mouthpieces, the MSM, to get everyone to buy into the idea the government is the solution. The Dems are probably uncorking the champaigne right now over having an $800/per person rebate which will be politically spun into an $800 per vote purchase in the general election. Since it will probably be means capped, that results in an outright purchase of the lower and middle class vote.
The real issue here is who started the panic in the foreign markets that spilled over into ours???? Whomever made gobs of money on short sales will be the primary culprit.
Given that consumer spending and gasoline sales were not down, nor was GDP reported as being down or Unemployment appreciably up, there was no logical reason for the sell off. The SEC needs to investigate and find those responsible for manipulating the market. This has the marks of a political black ops job written all over it. My bet is that the interested parties, i.e. a Dem supporter(s) or those benefiting by a Dem in the WH like Iran wanted to switch the dynamics of the US POTUS race to Domestic policy away from Foreign policy were Dems have been demonstrated as incompetent.
Comment by dscott — January 24, 2008 @ 12:16 pm
http://www.foxnews.com/story/0,2933,325192,00.html The fix is in, some details.
Comment by dscott — January 24, 2008 @ 12:19 pm
So because the fed issued the biggest one time rate cute in 23 years and the indexes went up 300 points your position is that everything is rosey?
Even with the big surge yesterday my 401K is down about 14% per share since December 1st. And don’t even think that yesterday was anything but a temproary surge brought on by sudden, cheap money.
The fact is nobody knows how bad the current credit crisis is going to get because nobody knows where all those repackaged CDOs finally ended up or how many of them are going into default. But what IS a sure bet is that the US consumer can’t afford to fuel the global economy on credit much longer and we AND our government are way past the point of being able to afford spending more than we make every year.
Comment by iaintbacchus — January 24, 2008 @ 12:47 pm
#5. You can’t compare a spot unemployment rate of 5% with a 8 year average. Clinton had unemployment under 4% for over two years and it only got back up to 4.25% because the fed raised intrest rates every quarter for a year and a half to “cool off” the economy.
Bush has had unemployment over 7% for most of his presidency. Also, unemployment is always lower in the 3rd quarter, which is where your figures have be coming from because we’re not far enough into 1st quarter 2008 for the figures to be out yet.
I’m thrilled that Bernake hasn’t lower interest rates as low as Greenspan did in 2004. That was how we got into this mess in the first place. But it IS an election year and I can just about gaurantee that there will be further “adjustments” downwards. “Never bet against the fed in an election year” has been gospel as long as there has been a federal reserve.
Comment by iaintbacchus — January 24, 2008 @ 1:01 pm
#6, So you know that the next two quarters will have negative growth? Otherwise, we’re not in a recession.
#9 —
So because the fed issued the biggest one time rate cute in 23 years and the indexes went up 300 points your position is that everything is rosey?
Yeah, that’s exactly what I said. (/sarcasm)
I certainly never said we don’t have long-term problems, either.
#10 - Bush has had unemployment over 7% for most of his presidency.
Bullcrap:
2002 average - 5.8%
2003 average - 6.0%
2004 average - 5.5%
2005 average - 5.1%
2006 average - 4.6%
The highest individual month for unemployment was 6.3% in June of 2003.
You’re a victim of your own brainwashing.
Comment by TBlumer — January 24, 2008 @ 2:18 pm
dscott,
Re: your comment about the MSM being a mouthpiece for the Dems.
People (and corporations more so) act in their own economic best interests, so of course the corporate MSM supports the Dems over the GOP. The MSM knows the GOP will ruin the gravy train the pro-business Dems have built for them.
Either that, or I just called you out for one of the most ridiculous lies Rush could think up for you.
Here’s some advice for you: Use some Common Sense before you go spouting your inanities in public, otherwise you come across as nothing but a fool.
Comment by Robert in BA — January 24, 2008 @ 2:57 pm
i, as a consumer, have great confidence in the economy and would be out spending like a madman if i had any money
Comment by ibfamous — January 24, 2008 @ 3:38 pm
#13, I hear the late-night shows need writers.
Comment by TBlumer — January 24, 2008 @ 3:45 pm
“People (and corporations more so) act in their own economic best interests, so of course the corporate MSM supports the Dems over the GOP. The MSM knows the GOP will ruin the gravy train the pro-business Dems have built for them.”
Thank you for having the honesty to admit the MSM is the mouthpiece for the Dem Party. And by logical extension thank for your validating that is it in the MSM’s best interest to talk down the economy by putting everything in the worst possible light to engineer a Dem victory in Nov 2008.
Now don’t you feel foolish? The MSM “knows” the Dems being pro-business, what a farce, so that’s why they proposed hiking taxes on Mutual funds??? Yes, please talk up tax hikes, the average voter understands exactly what you intend, money out of their pockets for Dem vote buying scams. Yeap, you keep spinning that line, and the ratings of the MSM will go to zero in a few more years, I take it you can read a trend line?
Comment by dscott — January 24, 2008 @ 4:24 pm
#11 Absolutely right. I pulled the 7% figure from memory and it only applies to my home state, where unemployment got as high as 8.5% and stayed there for almost 3 years. But you’re still hedging. You guessed at the Clinton era averages and then applied an unfair comparison.
We’re at 5% unemployment now. Overall unemployment in 2007 was 4.6%. Things are getting worse, not better. And unemployment went up in both November and December this year according to the US department of labor. That’s unemployment increasing during the Christmas shopping season. I can hardly wait for the January figures to come out.
But that isn’t the point. We now have the State of NewYork putting together a $15bn deal to bail out the two largest Bond Insurance companies, the firms that underwrite everybody else’s credit and it doesn’t look like they will be successful. You’ve got every major home loan writer in the country cutting jobs and taking multi-billion dollar write downs. The federal debt has doubled in the last 6 years while the real GDP has only increased by 13% in that time. The trade deficit was over $700bn last year and is goning to get worse because the dollar is getting weaker against just about everything. You even have Bill Gates and the CEO of Walmart saying that capitalism isn’t working anymore.
In short, we are in for a rough next few years. It ain’t the “media vultures†predicting a recession, it’s everybody who can read.
Comment by iaintbacchus — January 24, 2008 @ 11:38 pm
#16,
It ain’t the “media vultures†predicting a recession, it’s everybody who can read.
It’s one thing to predict it, it’s another to assume we’re in it already when the proof is sketchy at best. Just one example — ISM, which publishes the mfg and non-mfg indices every month, said that the economy expanded for the 74th month in a row in Dec.
I really want to be patient, but you can’t get the basics right. I didn’t “guess at the Clinton era averages and then applied an unfair comparison,” I remembered them pretty well, and you didn’t even bother to look at the link I went to for the Bush-era averages.
Unemployment (Clinton responsibility begins in 1994, ends in 2001):
1994 — 6.1% average
1995 — 5.6% average
1996 — 5.4% average
1997 — 4.9% average
1998 — 4.5% average
1999 — 4.2% average
2000 — 4.0% average
2001 — 4.7% average
Average — 4.925%
My “guess” that the current 5% is below the Clinton-era average would be right if I did what most do, and (incorrectly) took out 2001 and added in 1993’s 6.9%. Then the average would be an indeed higher 5.2%, a figure I’m sure I read somewhere.
Bush 2002-2007 average: 5.28% (would be 5.2% if you unfairly gave him 2001).
IOW, Bush has been below the Clinton average in 2006 and 2007 (when it’s published, it will be 4.7%), and barely above it in 2005. Bush’s two rough years are almost identical to Clinton’s, and the bubbly excesses 1999 and 2000, combined with the Sept. 11 attacks, explain them.
Unemployment went DOWN in Nov. (seasonally adjusted, the one that gets the ink, 4.7% v. 4.8% in October).
I’ve acknowledged that there’s some slowing down occurring and structural problems that are well-known to all.
Here’s a good Q: What % of Americans know that the main indices are up by 0.8% (nasdaq) to 2% (Dow, S&P) for the week? Why is that? What % assume they’re all down because all they heard about was the horrid start on Tuesday, and nothing since?
Comment by TBlumer — January 25, 2008 @ 12:10 am
Um. We’re in a credit crisis as serious as we have seen in the last fifty years. It hasn’t even begun to finish unwinding yet. The hedge fund crisis we are about to hit (in Europe and here) will compound the mess. The markets are down almost ten percent just this year alone, and mortgage rates for jumbo loans are still in the high 6’s, if you can get one (try!). The housing market continues to slump. And none of this has yet to play out in full, or impact the consumer spending numbers like it will. It’s a depression in the making if we’re not careful, and you’re engaging in wishful thinking if you think otherwise.
Comment by hastingspete — January 27, 2008 @ 10:50 pm
#18, tell that to Brian Wesbury (my related post).
Comment by TBlumer — January 28, 2008 @ 9:19 am