Re: Blog Claim "Markets Flat Before Geithner's speech", Really?
Posted: Thu Feb 12, 2009 3:49 am
I am not a news moves market guy. What I do believe moves markets is the preconceived plans of traders. There are a lot of people that think that Obama and Geithner can make the markets go up, just like they believe that the Fed can make them go up. That is true when the trend is pushing upward, which is the case when the economy is providing actual asset inflation cash. But, when assets are consuming cash like they are now, nothing makes the market go up. So, people have been buying for the past couple of months in anticipation that good things are just around the corner and you don't want to miss it. Also, people are holding on for the same reason. This is a long trend bubble and people have been trained to stay the course. Robert Prechter said people would buy this one until it broke all of them, that the bottom in this grand supercycle bear would be maybe as low as sub 100 on the Dow.
I have waited to watch this one for a long time. I thought 2000-2002 would be this one, but they interrupted it with 9/11 and FNMA. What I have seen is repeated fixes being put in. You might recall that they came into 2007 with the idea the Fed would have to cut and we would have a soft landing, so pile into stocks and catch the strong move, like happened in 1997. We got the cut, they bounced a little in October 2007, then it ran out of steam. We had a mild panic in January 2008 and some kind of fix happened and the market rallied. Of course, they came up with this, we must retest the bottom then things will be okay, so Bear went on the blink and the rescue came in mid March. There were about 3 or 4 hot days that got the market back to a little over Dow 13,000, a 5/8th retrace from the top on the first of May and it melted again, this time to about 10,700. This time they bailed out FNMA. Remember the CNBC nonsense rumors about the monoline insurers and the NY insurance commissioner moving the market 500 points in an hour or 2? Another fix in, another bottom, no carrythrough. Same as FNMA. We were up close to 1000 points in a week or so and another selling opportunity.
Then what came? The first leg of wave 3 of wave 3. This is where we are, the first leg of the first leg of wave 3. Breakdown into mid September and a collapse of Lehman, Fannie, Freddie and AIG in a week. That is about $12 trillion of capital management or banking in a few days, about 25% of the debt management in the US in 1 big bomb. Then the complaint becomes, too many short sellers shorting the price down so these very wealthy and solvent institutions can't raise any capital, so lets ban shorting and get Congress to approve $700 billion to buy all the bad crap so we can get back to a bull market. Remember the first vote, where the raging bulls had bought up all the stock they could hold and the vote failed. The kids threw their green peas against the wall and bailed. Then the Senate got involved, packed some bacon sandwiches in the bill and got it passed. So, the bulls piled in again, waiting to get rich when the bill passed. Do you remember what happened? That was a Friday. I want to say it was October 3. The market was around 10,800 from what I recall and it went down 600 points or so when the bill passed. The market was 9500 by Monday morning and it rallied to close around 10,000. By that next Friday it had touched 7700 and rallied to close on some kind of nonsense to 8400 or so and made a 1000 point move that day before it collapsed something around 300 points the last 30 minutes. I couldn't believe what I was watching.
So, what is next. Obama gets elected we are saved. They rally the market to 9600 or so for election eve and it collapses the next 16 days to around 7500. The Obama election was a bigger disaster than the 9/11 disaster, which only made 8100 from the same level. Then we bounced as Paulson did some TARP work. What was next? a bottom and we will be okay in 60 days because the new guy is going to fix it. We get to 9000 twice and the market falls apart at the first of the year. People have been buying for the event of this stimulous package and the bank bailouts. Wait and see what happens when they pass the stimulous bill. Today the news got a 60 point move and it went flat. The Geithner appearance at Congress was anticlimatic. It wouldn''t have mattered what he said.
Anyone who can't figure out that modern economics is so much voodoo and illogical that it cannot work is an idiot. These guys are throwing kitchen sinks at the banking system because they know that their success is predicated on getting the banks past their administration to the next administration and that without massive debt creation, their time in the barrel is a tragedy. It is amazing that the only way to economic success is selling yourself, your kids and their kids into some kind of permanent bondage and when the bondage holders lose their grip, we are supposed to sing up for more bondage so they don't go broke and those of us that were smart enough to stay out of this wringer or get out of it don't gain ownership of their scam. The problem is that we go from bankrupt to in debt to where an even greater bankruptcy is the only path. The problem is too much debt and the only solution is not only more, but more to bail out billionaires and fat cats. Fat cats put these guys in.
I will add one more thing. Timothy Geithner is beyond shame. The guy is basically the Secretary mentioned in the IRS code, yet he couldn't follow the rules. He was the head of the NY Fed and the chief regulator of many of the main culprits in this crisis, yet he attempts to present this as a problem created by the last administration. Geithner is clearly a Clinton guy, a Rubin guy, so he is most likely Fed Chairman of NY due to a Clinton appointment, as these terms go 14 years. The guy was the most powerful regulatory banker in the US, presiding over the worst banking decisions in history. Yet he attempts to put this and all the failures so far on the Bush administration. The Federal Reserve has been running this show for a long time. Bush clearly brought Paulson in because someone could see this mess coming and thought Paulson might be able to tie it back together. No one can tie together a busted banking bubble when the aim is that there aren't any losers. It is clear that the US system was operating with the fat cats having no skin in the game. Does anyone understand that? Do they understand that these big players were taking on this stuff with no money up? It all rolled back on the banking system and the taxpayer when it failed. That is what all these guys are waiting for now, 100% financing and 100% guarantees to buy this crap with nothing down at 25 cents on the dollar with no recourse loans.
I have waited to watch this one for a long time. I thought 2000-2002 would be this one, but they interrupted it with 9/11 and FNMA. What I have seen is repeated fixes being put in. You might recall that they came into 2007 with the idea the Fed would have to cut and we would have a soft landing, so pile into stocks and catch the strong move, like happened in 1997. We got the cut, they bounced a little in October 2007, then it ran out of steam. We had a mild panic in January 2008 and some kind of fix happened and the market rallied. Of course, they came up with this, we must retest the bottom then things will be okay, so Bear went on the blink and the rescue came in mid March. There were about 3 or 4 hot days that got the market back to a little over Dow 13,000, a 5/8th retrace from the top on the first of May and it melted again, this time to about 10,700. This time they bailed out FNMA. Remember the CNBC nonsense rumors about the monoline insurers and the NY insurance commissioner moving the market 500 points in an hour or 2? Another fix in, another bottom, no carrythrough. Same as FNMA. We were up close to 1000 points in a week or so and another selling opportunity.
Then what came? The first leg of wave 3 of wave 3. This is where we are, the first leg of the first leg of wave 3. Breakdown into mid September and a collapse of Lehman, Fannie, Freddie and AIG in a week. That is about $12 trillion of capital management or banking in a few days, about 25% of the debt management in the US in 1 big bomb. Then the complaint becomes, too many short sellers shorting the price down so these very wealthy and solvent institutions can't raise any capital, so lets ban shorting and get Congress to approve $700 billion to buy all the bad crap so we can get back to a bull market. Remember the first vote, where the raging bulls had bought up all the stock they could hold and the vote failed. The kids threw their green peas against the wall and bailed. Then the Senate got involved, packed some bacon sandwiches in the bill and got it passed. So, the bulls piled in again, waiting to get rich when the bill passed. Do you remember what happened? That was a Friday. I want to say it was October 3. The market was around 10,800 from what I recall and it went down 600 points or so when the bill passed. The market was 9500 by Monday morning and it rallied to close around 10,000. By that next Friday it had touched 7700 and rallied to close on some kind of nonsense to 8400 or so and made a 1000 point move that day before it collapsed something around 300 points the last 30 minutes. I couldn't believe what I was watching.
So, what is next. Obama gets elected we are saved. They rally the market to 9600 or so for election eve and it collapses the next 16 days to around 7500. The Obama election was a bigger disaster than the 9/11 disaster, which only made 8100 from the same level. Then we bounced as Paulson did some TARP work. What was next? a bottom and we will be okay in 60 days because the new guy is going to fix it. We get to 9000 twice and the market falls apart at the first of the year. People have been buying for the event of this stimulous package and the bank bailouts. Wait and see what happens when they pass the stimulous bill. Today the news got a 60 point move and it went flat. The Geithner appearance at Congress was anticlimatic. It wouldn''t have mattered what he said.
Anyone who can't figure out that modern economics is so much voodoo and illogical that it cannot work is an idiot. These guys are throwing kitchen sinks at the banking system because they know that their success is predicated on getting the banks past their administration to the next administration and that without massive debt creation, their time in the barrel is a tragedy. It is amazing that the only way to economic success is selling yourself, your kids and their kids into some kind of permanent bondage and when the bondage holders lose their grip, we are supposed to sing up for more bondage so they don't go broke and those of us that were smart enough to stay out of this wringer or get out of it don't gain ownership of their scam. The problem is that we go from bankrupt to in debt to where an even greater bankruptcy is the only path. The problem is too much debt and the only solution is not only more, but more to bail out billionaires and fat cats. Fat cats put these guys in.
I will add one more thing. Timothy Geithner is beyond shame. The guy is basically the Secretary mentioned in the IRS code, yet he couldn't follow the rules. He was the head of the NY Fed and the chief regulator of many of the main culprits in this crisis, yet he attempts to present this as a problem created by the last administration. Geithner is clearly a Clinton guy, a Rubin guy, so he is most likely Fed Chairman of NY due to a Clinton appointment, as these terms go 14 years. The guy was the most powerful regulatory banker in the US, presiding over the worst banking decisions in history. Yet he attempts to put this and all the failures so far on the Bush administration. The Federal Reserve has been running this show for a long time. Bush clearly brought Paulson in because someone could see this mess coming and thought Paulson might be able to tie it back together. No one can tie together a busted banking bubble when the aim is that there aren't any losers. It is clear that the US system was operating with the fat cats having no skin in the game. Does anyone understand that? Do they understand that these big players were taking on this stuff with no money up? It all rolled back on the banking system and the taxpayer when it failed. That is what all these guys are waiting for now, 100% financing and 100% guarantees to buy this crap with nothing down at 25 cents on the dollar with no recourse loans.
