Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Obama Stock Market Bounce or Bump?

Stock-Markets / Financial Markets 2009 Jan 20, 2009 - 05:16 AM GMT

By: PaddyPowerTrader

Stock-Markets Best Financial Markets Analysis ArticleU.S. markets were closed yesterday for Martin Luther King Day ahead of Obama's big day out today. So will we get a Barack bounce or bump? Well we will most likely see some sort of knee-jerk rally on such a historic day. But then we will have the hangover induced by the same old same old issues of evaporating earnings, dismal future guidance, rising unemployment, continued falls in house prices and an increasing foreclosure rate.


Markets had a sobering session overnight with renewed and heightened banking worries from the UK. RBS were down 70% at one stage yesterday as they are set to report the biggest loss in British corporate history.

Today's Market Moving Stories

  • The German tabloid paper Bild quotes a government report predicting an unprecedented 2.25% contraction in the country's economy as it enters “a deep recession” at “extraordinary speed”. Over to you Mr Trichet. Being a Central banker is easy; it's just events that trip you up. How stupid does he look (yet again) now just four days after ruling out a February rate cut? Note that the EU Commission also slashed their 2009 “growth” forecast for the Euro area to a discomforting –1.9%.
  • The UK bank bailout package was overshadowed by a lack of detail as to how the ‘ bad banks ' will work in practice, a fear of full RBS nationalization and whether still more capital will be required for the other high street banks. There are suggestions that ABN could be sold back to the Dutch government! But not for the €50bn RBS unwisely paid for it in CASH.
  • A story doing the rounds is that Anglo Irish Bank will be used as a ‘ bad bank ' and recipient of bad assets from AIB and Bank of Ireland and run down over say 10 years. Anglo would then be merged with Irish Life and Permanent, Irish Nationwide and EBS to leave then large banks across the system. All sounds a tad complicated to me.
  • The British peso in under the hammer again today and has slipped to a record low versus the Yen this morning.
  • Japanese consumer confidence fell to an all time low of 26.7 from 31.2.
  • Check out this brilliant flow diagram explaining the path of the financial crisis .
  • And money is too tight to mention for U.S. corporates .

Some Thoughts On Where We Are In The Banking Bailout Mess
Although major banking system rescue packages were introduced last October, they clearly didn't go far enough. We should not be surprised, since financial history teaches us that governments rarely, if ever, resolve banking crises first time round. Lack of political courage and/or lack of full awareness of the state of solvency in the banking system are normally the main factors. Financial stability, therefore, remains both a mirage, and a sine qua non for an eventual recovery in financial markets and, later, in the economy.

A succession of recent events and earnings announcements (Germany, Ireland, US and UK) highlights the importance of another round of capital injections, loan guarantee arrangements, and this time, attempts to formalise bad bank schemes . As we move into and through this stage, we are likely to see more nationalisation and more separation of good from bad banks. The main issue with a bad bank solution is of course the PRICE that is paid for the toxic assets. This is likely to be OVER the market clearing price (which of course has never been established) therefore leaving the taxpayer overpaying for the bailout of the bailout.

Most economists believe that the Achilles Heel of the current US bank rescue plan is that it gets money into banks, but the capital does not come out the other end in the form of loans to businesses and individuals. Businesses cannot conduct their affairs in the normal course. The average citizen cannot get a home loan or expand his access to credit, even though it is his taxes, present and future, which is the source of the bailout funds in the first place.

Thoughts On The “Economist” David McWilliams
The Irish banks took a mighty thumping yesterday. Part of the reason was because of populist “economist” and shameless self publicist David McWilliams shouting the financial equivalent of fire in a crowded theatre in an interview with the state broadcaster RTÉ.

These comments were picked up by the Telegraph. Never a paper to let the facts get in the way of a bit of Paddy Bashing, they whipped it up. This of course was picked up by various ill informed commentators calling David McWilliams a former Irish central bank economist. God he was barely out of short trousers when he was there, neglecting of course to say why such a guru had been fired by both UBS and BNP Paribas! Let's not forget that he's been calling the top in Irish housing since the late 90's. Yawn. At this stage a large sock full of manure down his big ginger mouth would be in the national interest.

Equities

  • Fiat to take a 35% stake in Chrysler . I don't know who to feel sorrier for.
  • Profit warnings from household names BASF and Air France.
  • Computer mouse maker Logitech is off 10% after reporting sales down 70%.
  • Belgian bank KBC needs more capital (share price down 30% yesterday).
  • Luxury goods maker Burberry managed to buck the trend with sales up on discounting.
  • Earnings today from IBM (expected EPS $1.14), J&J ($0.92) and State Street Bank ($1.14).
  • Watch the smaller regional banks to see what extent the reported slump in CRE (commercial real estate) is impacting their already distressed bottoms lines.

And Finally… Bernie Madoff Cuts A Deal

Disclosures = None

By The Mole
PaddyPowerTrader.com

The Mole is a man in the know. I don’t trade for a living, but instead work for a well-known Irish institution, heading a desk that regularly trades over €100 million a day. I aim to provide top quality, up-to-date and relevant market news and data, so that traders can make more informed decisions”.

© 2009 Copyright PaddyPowerTrader - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PaddyPowerTrader Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules