The market’s got a fee-vah and the only prescription is more Tim Geithner
posted at 6:25 pm on March 23, 2009 by Allahpundit
The “cash for trash” plan debuts and the result is the fifth-biggest point gain in Dow history. Has TurboTax Tim at last undone the damage from last month’s speech fiasco? Hope springs eternal:
The Treasury plan “may be a game-changer, because it’s been sprinkled with some better-than-expected economic data,” says Tom Sowanick, chief investment officer at Clearbrook Financial in Princeton, N.J. “If the tea leaves all start to line together I think this will be the beginning of a major bull market.”…
“You cannot fight this intervention,” Steve Grasso, of Stuart Frankel, told CNBC. “When you start to see the market just climb after weeks and months of being sold out, you have to participate.”
Traders tell the NYT the euphoria’s due partly to the promise of more free money and partly to the good ol’ fashioned certainty that comes with finally having a definitive plan, a point reiterated at length by one of Geraghty’s readers. Is it true, though? Hmmm:
The stock market’s latest bounce had the S&P 500 tallying its best three-day winning streak since late November, yet the CBOE Volatility Index — which measures uncertainty — edged only slightly lower, signaling ongoing wariness about the market’s direction…
“The VIX is obviously responding to the positive action in the equity markets, but the fact remains that north of 40 remains elevated in relation to where it was trading prior to the crisis,” said Dan Greenhaus, an analyst at Miller Tabak.
“There is clearly uncertainty and nervousness in the markets irrespective of the short term move higher and as long as those general feelings continue, the VIX is going to have a hard time moving considerably lower,” said Greenhaus.
Exit question: As much as I hate to agree with him, isn’t Krugman right? Isn’t this just the Paulson plan v2.0?
Update: The plan won’t work, says Henry Blodget, because toxic assets and tight credit aren’t the problem. Debt is. And he’s got the frightening graphs to prove it.
Once the banks start lending, the economy will recover. The reality: American consumers still have debt coming out of their ears, and they’ll be working it off for years. House prices are still falling. Retirement savings have been crushed. Americans need to increase their savings rate from today’s 5% (a vast improvement from the 0% rate of two years ago) to the 10% long-term average. Consumers don’t have room to take on more debt, even if the banks are willing to give it to them.
Blowback
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Terrye on March 23, 2009 at 7:32 PM
I know. And if he would give us peons the freedom to allow the economy to fix itself, then he would not be able to present himself to be the benevolent Dear Leader that he is.
It makes no difference that Socialism has never, ever worked. Mr. President is so brilliant, he will make it work.
Yeah, riiight.
kingsjester on March 23, 2009 at 7:37 PM
thomasaur:
Oh, but you are everywhere.
Terrye on March 23, 2009 at 7:37 PM
btw, Terrye, etc. these policies simply can’t get us out of this whole… they only stand to bury us further. There is no debate about this.
We may get a bump that looks like we are coming out of this thing (once all of this fake money is fully injected), but what about the runaway inflation that will certainly follow, not to mention the $80 trillion we are in debt?
RightWinged on March 23, 2009 at 7:39 PM
Another prime example-it’s not exactly good salesmanship to try and sell a lakefront property in February when the ice on the lake is 20 inches thick and there’s a bitter cold -10 degree temperature combined with a 40 mile per hour wind blowing straight down from the North Pole.
Del Dolemonte on March 23, 2009 at 7:40 PM
But I’m a nobody,so if nobody is everywhere does anyone notice
thomasaur on March 23, 2009 at 7:42 PM
Here, you can wear my tinfoil hat.
Del Dolemonte on March 23, 2009 at 7:42 PM
Well you could always say that; “it doesn’t get any worse than this”
thomasaur on March 23, 2009 at 7:44 PM
thomasaur:
Well, I am wherever you are, so if you are nowhere, then I am nowhere too.
I think.
Terrye on March 23, 2009 at 7:51 PM
Rightwinged:
I confess I wonder at the same thing. The debt is just so overwhelming.
For years I heard that Bush was going to bankrupt the country with Iraq. I heard the Democrats blame any bad economic news on that spending and now it is as if the deficits just do not matter.
Terrye on March 23, 2009 at 7:53 PM
Buying toxic assets to make lending open up to . . . whom? The companies hoarding cash for the coming EPA and other business-crushing moves? The 88% of people that still have jobs? The people with zero equity or owe more on their house than it’s worth?
All this while they have to raise taxes to service all this debt they are buying. The people on the stock market are nuts and the real brains will start selling off as soon as they think it’s hit its bear rally top.
PastorJon on March 23, 2009 at 7:57 PM
Rightwinged:
Well the difference there was that Bush TRIED to address social security… but they blocked him. He also brought us out of the Clinton recession and 9/11 with tax cuts that led to a RECORD 52 CONSECUTIVE MONTHS OF JOB CREATION, which then led to RECORD TAX REVENUE (and despite what the left would have us believe, the rich actually paid an even bigger share under Bush). Actually for a time, Bush’s record tax receipts were chopping away at the deficit.
RightWinged on March 23, 2009 at 8:00 PM
Jesus H. Christ…
Ya know what? If this country goes through a deep recession or a depression, morons like this would starve to death.
I’m ready to tighten my belt.
BigWyo on March 23, 2009 at 8:04 PM
I agree with you to a large extent. But that doesn’t address my central point: you shouldn’t be unreasonable just because other people are. If you consider yourself a soldier in the fight against the Left who does whatever it takes, fine. But when you admit that, any reasonable person won’t want to continue having a discussion with you. And I don’t think you do consider yourself to be that, so I don’t know why you’re making this argument.
You’re acting like it’s okay to put forward unreasonable arguments just because everyone else does.
tneloms on March 23, 2009 at 8:07 PM
Wherever you go, there you are but I am everywhere.
Great day today do lets save the doom and gloom for tomorrow.
Oh that’s right, for him to fail, everyday is doom and gloom for the cons.
getalife on March 23, 2009 at 8:10 PM
Apparently, Mom left the airplane glue out again.
BigWyo on March 23, 2009 at 8:15 PM
I agree with you, and I didn’t mean to imply that they’re the fringe in the sense that no one listens to them. It’s terrible how mainstream stuff like that is.
I was pointing to DailyKos as an example of shrill idiots who consistently engage in one-sided, knee-jerk, hyperbolic rhetoric. Even if they’re mainstream, why would anyone want to act like them? Why would you want to make the “well they do it so we can do it” argument?
The problem with making that argument is that then they can say “well they do it so we can do it” right back at you. And they’ll be right! It’s the lowest possible level of discourse, it’s found all around the blogosphere, and it’s horrible. Instead, you should highlight their hypocrisy while only making reasonable, consistent arguments yourself.
tneloms on March 23, 2009 at 8:15 PM
Way to avoid all points I and others raised, douche. Either you’re completely pathetic, or you’re paid to be here, likely funneled down Soros cash, to lower the discourse.
That said, speaking of “failure”, I suppose you didn’t hear what Carville said on the morning of 9/11? I suppose you didn’t see the poll showing the vast majority of Democrats wanting Bush to fail… while hundreds of thousands of troops are in war zones! The difference being that we want Obama to fail, because his success will be a failure for the country.
RightWinged on March 23, 2009 at 8:15 PM
And I think my point applies even if you’re not going for pure intellectual honesty, but are actually trying to play the game of convincing people.
You won’t ever convince shrill idiots who disagree with you no matter what you do, but you’ll also never convince reasonable people who disagree with you if you take inconsistent and one-sided stances and point out that the other side does it too. You might convince reasonable people with reasonable, consistent arguments.
tneloms on March 23, 2009 at 8:16 PM
tneloms:
I think the markets really were worried about Obama. Not because of anything he did or did not do, but because he was an unknown. So to that degree, I do think he had some impact on the market.
I also think that some of his policies are considered anti business as well.
I am not saying that I think the president has nothing to do with the markets or the economy, only that their importance is exaggerated for a variety of reasons.
However, I think that Barack Obama is trying to deliberately insinuate himself and his policies into the economy in ways that are almost unprecedented. For this reason I do hold him somewhat more responsible for the bad numbers we saw in the market earlier.
Therefor, in comparing Bush and Obama you are comparing apples and oranges. They are not the same. The left blamed Bush because they hated him. I blame Obama because he is everywhere.
I also think that events effect the markets. There are things no one can control and often times efforts to control things only create unintended consequences. So we do not know what to expect. That effects the markets as well.
Terrye on March 23, 2009 at 8:17 PM
Well, again, to clarify, I wasn’t jumping in whatever discussion you had… I actually agree with what you’re saying. My only problem was that it sounded like you were pretending that the Kos isn’t as powerful as they are. But acting like them just because they do something isn’t responsible… I don’t know whether Terrye was doing that or not, cuz again, I wasn’t entering that part of your discussion. Just addressing the power of Kos.
RightWinged on March 23, 2009 at 8:18 PM
Just remember that two wrongs don’t make a right but three do!
thomasaur on March 23, 2009 at 8:22 PM
Okay, then we agree :). And for the record, I don’t think Terrye was doing that (just defending others doing that).
tneloms on March 23, 2009 at 8:23 PM
Digging the hole deeper to the point where it will be deep enough to bury us all…. if it isn’t already and just hasn’t collapsed in on us yet.
It’s really quite depressing to watch the destruction of your country in slow motion and not know what, if anything, can be done to stop it.
:(
Yakko77 on March 23, 2009 at 8:26 PM
What would debt at 80% of GDP do the overall economy? And has Obama even thought about that?
Terrye on March 23, 2009 at 8:29 PM
You’ve made this post a few times. You really can’t think of anything original?
The doom and gloom comes from the fact that the adults know exactly how Obama’s Magical Money Printing strategy is going to end.
Chuck Schick on March 23, 2009 at 8:40 PM
Well I can agree with most of what you just said, which is a reasonable and consistent criticism of the administration.
tneloms on March 23, 2009 at 8:48 PM
Lets hope he does not leave a depression , tax cuts for the wealthy, two wars and a broken government when he finishes his second term.
getalife on March 23, 2009 at 8:52 PM
getalife:
First of all he has of yet to win a second term.
And as for tax cuts to the wealthy, Obama is more the direct payments to the wealthy kind of guy.
As for two wars, well we are still fighting at least one war and as much as it breaks your heart to know that Saddam is not still filling mass graves in Iraq…we went to that war with the approval of both parties.
So, since Obama has thus far spent more money in less than two months than Bush did in two terms. And since thus far, kissing butt for the mullahs has not brought them to their knees, I think there are still all sorts of things that could go wrong. All sorts of things.
Terrye on March 23, 2009 at 8:59 PM
I don’t get who would buy anything like toxic assets.
This too will fail.
Buy gold
Mercy4Me on March 23, 2009 at 9:00 PM
Oop forgot the massive deficit.
getalife on March 23, 2009 at 9:00 PM
Excellent job Allah! Next,try this headline: Ten Positive things about ACORN. Then watch the traffic.
RMR on March 23, 2009 at 9:01 PM
In real life I live in the town known as the ice fishing capitol of New Hampshire. But the typical ice fisher-person cannot afford a lakefront home here anymore. Even with the real estate woes, you need at least a million bucks to get something decent on the big lakes here.
That’s why the ice fisherpeople use bobhouses, which are shacks they drag out on the ice to shelter them from the wind and cold while they try to catch a trout or salmon. I’ve even seen them with DirecTV dishes bolted to the outside.
Del Dolemonte on March 23, 2009 at 9:07 PM
I just bought a new toaster.
johnnyU on March 23, 2009 at 9:09 PM
Hedge funds whose losses will be covered up to 90% or more by the Treasury. If the funds make a profit, they keep it. If they lose money, they will be insured almost in full.
Heads they win. Tails we lose.
Wonder whose hedge fund might invest….
Wethal on March 23, 2009 at 9:10 PM
Same thing in the midwest. There are public beaches, but one uses them to drive out onto the lake. Went ice fishing once as a kid. Sitting over an open hole in the ice, in temps cold enough to freeze the lake down enough feet to hold up a truck or car, freezing your toes off, just so you can go home, saying, “It’s fresh! I just caught it!”
Wethal on March 23, 2009 at 9:13 PM
Oops, Getalife, you also forgot to answer the question why was Carter the first president in modern times to be critical of a current president. No, Gop president that I know of has critized a sitting democrat president. I only remember Carter and Clinton doing these things. By the way Caterpiller isn’t going to be doing any rehiring soon anyway and I guess the recession is still going.
garydt on March 23, 2009 at 9:15 PM
I livr in the Rockies and the wind was blowing 40 to 50 mph last night and snowing. Woke up to 3 ft. drifts in the driveway. There’s a lake about 35 miles away that the ice fishers drive out onto. Never quite got their fever for fresh fish in the winter. But it takes all kinds.
thomasaur on March 23, 2009 at 9:23 PM
getalife, Bush left a recession, not a depression as youve pointed out, tax cuts worked, and Obama will be quadrupling Bushs deficits.
Add to that
-Obamas 2 spending bills alone will add as much to the debt that Bush did in 8 years
-today gave a trillion more in borrowed money to wall st
-will leave the next president trillion $ deficits even after 8 years
…considering Barrys only been on the job 2 months is pretty impressive.
Chuck Schick on March 23, 2009 at 9:35 PM
Yes very.
He is off to a great start and has 8 years to reform government, complete his agenda and cut the deficit.
getalife on March 23, 2009 at 9:49 PM
I’ll get back to Chuck and getalife when the market nose dives again. The current administration has yet to set a track record for consistency of action.
GarandFan on March 23, 2009 at 9:58 PM
I am now convinced getalife is a plant by hotair staff. Even the lowliest of trolls isn’t that obtuse.
angryed on March 23, 2009 at 10:13 PM
Should not waste anymore time with this getalife character, but not all gloom and doom was coming trom conservatives, the Krugman article is all the evidence needed to prove that.
And the Blodget article is right on. There is no problem getting a mortgage or car loan if you have a credit rating in the range of 750 to 810.
Geithner is a
Dreadnought on March 23, 2009 at 10:17 PM
Nope.
getalife on March 23, 2009 at 10:24 PM
Cheer up. If the gop ever get power again, you can cheer them on in destroying everything the President accomplishes.
getalife on March 23, 2009 at 10:25 PM
Hey getalife, since you can’t answer current questions, can you at least answer one back in 2004? There was a great mystery on what John Kerry’s plan for Iraq was and all through his campaign he never did have any specifics. My guess was he was in favor of handing it so the Saddamite hacks and then evacuate US forces. Do you have any idea what Kerry’s plan was?
garydt on March 23, 2009 at 10:27 PM
Should not waste anymore time with this getalife character, but not all gloom and doom was coming trom conservatives, the Krugman article is all the evidence needed to prove that.
Geithner is a quack, and even worse, a hack. This is a gaming of Wall Street for purely political reasons; it makes the the biggest rumor-mongering, short-seller look positively quaint.
Obviously the slow but steady drip drip of the poll numbers sinking, combined with the increasing criticism coming from formerly supportive center-left pundits started to freak out Mr. Obama.
Hell, he certainly looked freaked-out with his silly giggling on 60 Minutes-that was a putrid display of leadership. Yes, it’s fine to have a sense of humor in dire times, but you laugh at yourself, not at other people problems. What an arrogant ass.
So yeah, let the investment banks gamble on securities with the house’s money. Fun fun fun. That will pull the Dow up (for a while), and will cool off the mob that is starting to form (but not for long). But Obama is gambling that it will give him enough breathing space to enact at least some of his agenda. Slight-of-hand. How totally cynical and short-sighted.
Dreadnought on March 23, 2009 at 10:49 PM
He’s already committed the nation to 4 trillion dollars in new debt. And that was on week #6.
Don’t forget another trillion today he gave to Wall Street.
Chuck Schick on March 23, 2009 at 10:51 PM
Oh yeah- the CBO is even saying his budget numbers are pure crap.
Chuck Schick on March 23, 2009 at 10:52 PM
I agree. Might even be a brand spanking new iPhone in Mr/Ms “getalife” future huh?
RMR on March 23, 2009 at 10:54 PM
Unfortunately, I think it is more likely that Obama’s reign is the “Bobby Bragan presidency”
http://books.google.com/books?id=8UwcKmWx128C&pg=PA79&lpg=PA79&dq=birdie+tebbetts+prepare+two+more+letters&source=bl&ots=TAEpxHOwSU&sig=j8TCdEUC-ZC11WqaFtEIQpX8JUQ&hl=en&ei=SUXISY-GMZPWMP3IvdwD&sa=X&oi=book_result&resnum=1&ct=result#PPA79,M1
Pretty soon I’m going to start the “Prepare two more letters” pool.
Dreadnought on March 23, 2009 at 11:11 PM
I think getalife is Michelle Malkin. Michelle Malkin channeling her idea of a silly naive dim witted slow thinking obtuse dumb as a bucket of rocks Obamabot.
Terrye on March 23, 2009 at 11:18 PM
Obama cutting the deficit…now that is funny.
Funny strange, not funny ha ha.
Terrye on March 23, 2009 at 11:19 PM
“Investors should sell bank stocks after they rallied 12 percent today because the Treasury Department’s plan to buy toxic assets won’t stop profits from dropping, Bank of America Corp.’s Richard Bernstein said.”
Chuck Schick on March 23, 2009 at 11:19 PM
getalife is posting under another name…
BigWyo on March 23, 2009 at 11:32 PM
If one does a proportional analysis of how far the Nikkei index fell after the Japanese government poured money into a stimulus plan for infrastructure analysis, then our stock market, after The One’s (blessed be his name) stimulus package and budget are enacted will hit 2,500.
Get out now while that dead kitty is up in the air.
Dhuka on March 23, 2009 at 11:50 PM
Why do we need a central banking system in the first place? People would save more in a free market. We have a debt backed currency. The ride will eventually end, why not have some foresight on the issue, for once?
Libertarian Joseph on March 24, 2009 at 5:03 AM
Ironic that on the day that Geithner announces his plan to allow Wall Street to play blackjack with house money, housing sales were announced to have increased 5.1%, thus illustrating how unnecessary the plan really is.
DarkKnight3565 on March 24, 2009 at 5:04 AM
Yakko77 on March 23, 2009
Something can be done, but it may be ugly.
Depends on the value of liberty. We used to know, instinctively, what it’s worth. Now we tend to stand around with our thumb up our butt waiting for a “leader” to remind us. Waiting until it all goes to hell and then stepping up to claim the mantle won’t cut it.
Praying for that leader to show up soon. My butt’s starting to hurt and I’d like to have use of both hands again.
SKYFOX on March 24, 2009 at 6:00 AM
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