Today could turn out to be an important day in the ongoing financial and economic crises. Stock markets overseas are riding declines of about 3%. European trading suggests that US stocks may decline even more today, perhaps as many as 300 Dow points.
The moves are significant because we’ve now decisively broken below the “technical support” level provided by the multiyear low reached in 2002. And we’re falling from a higher peak this time.
Stock markets are clearly discounting the fact that the Obama team are fighting the crisis with good intentions and not a whole lot more.
They’re also discounting an outlook for corporate earnings that could hardly be worse. I think that Q1 earnings will be very spotty, but on the whole will surprise on the upside, possibly setting up a rally in early April. But between now and then, the weakness may trigger waves of margin calls and panic selling, as in November. There’s no discernible bottom from here if that happens.
There’s not much more to say other than, let’s hope for the best.
Daniel Horowitz
Neil Stevens
Moe Lane
Steve Maley
Jake Walker
No Francis, It's Worse
Spartan4Life (Diary) Friday, February 20th at 10:16AM EST (link)I don’t even believe the Socialists have good intentions.
Call me crazy but, based on what they have done so far(Stimulus, Foreclosure bailout, bailing out fat UAW, and no viable banks plan), put me in the camp that thinks this group is actually hostile to investors. There is not one thing they have done that is pro-growth or pro-business. I guess there is some sort of payback to the rich in destroying the economy. That is the only thing I can figure.
Maybe when they figure out that everything does, in fact, trickle down, including malaise, they will reverse course. By that time we all may be in the streets.
Well, the "good news" is that the NYT is trading at about $3.75.
mbecker908 (Diary) Friday, February 20th at 10:43AM EST (link)Wonder how their Mexican investor is feeling these days?
14% + bailout = smile on face
djemi (Diary) Friday, February 20th at 10:56AM EST (link)Given the reported influence of the Mexican eliete(rich and corupt) on the Dems.
“If I can’t shoot rabbits,then I can’t shoot fascist”
“With age, comes Wisdom, but only if you are paying Attention, son” my ‘Old Man’
RS Help files (h/t JLenardDetroit) Grassroots in Michigan
Moes Strategy
14% is only as good as the supporting cash flow
streetwise (Diary) Friday, February 20th at 11:59AM EST (link)I haven’t looked at the NYT’s, but suspect it’s going down as well.
Shares are cheaper than the sunday editition
djemi (Diary) Friday, February 20th at 12:03PM EST (link)And I think I remember something about subscribers being down, ads revs down to I beleive.
“If I can’t shoot rabbits,then I can’t shoot fascist”
“With age, comes Wisdom, but only if you are paying Attention, son” my ‘Old Man’
RS Help files (h/t JLenardDetroit) Grassroots in Michigan
Moes Strategy
Dow 5000, 95% inherantences tax?
djemi (Diary) Friday, February 20th at 10:51AM EST (link)I say this because money has been cheap the last few years, and this is going to change, it has too.
And
As I see it the only way for the government to pay for what its spending now is to take it form another generation, the whole generational theft thing, but given BO’s redistrbution of weath thing, and it’s for the children stuff, and their being 90+ million of them with their lifetime of productivity and wealth building behind them to tax, I’m just saying.
“If I can’t shoot rabbits,then I can’t shoot fascist”
“With age, comes Wisdom, but only if you are paying Attention, son” my ‘Old Man’
RS Help files (h/t JLenardDetroit) Grassroots in Michigan
Moes Strategy
There's another source of govt funding in the present
6eorge Jetson (Diary) Friday, February 20th at 11:17AM EST (link)As you are keenly aware, all govt spending is funded by taxes, either explicit (e.g. the income tax) or implicit (i.e. printing money).
Unlike you or me, the Fed can just grant itself more dollars, much like a corporation granting shares of stock to its say, CEO. This granting doesn’t increase the value of the enterprise (i.e. our past, current, and future wealth building activities), it just makes each share a smaller portion of the the same pie. Of course, shareholders are aware of these types of redistributions and act accordingly by reducing their perceptions of the value of each dollar (i.e. an implicit tax in the present).
So value down, inflation up, intrest rates up, and dedt capasatity down?
djemi (Diary) Friday, February 20th at 12:00PM EST (link)As are governments around the world know
“If I can’t shoot rabbits,then I can’t shoot fascist”
“With age, comes Wisdom, but only if you are paying Attention, son” my ‘Old Man’
RS Help files (h/t JLenardDetroit) Grassroots in Michigan
Moes Strategy
Yep, there's nothing good in there nt
6eorge Jetson (Diary) Friday, February 20th at 5:11PM EST (link)Dow at 7320- Change you can believe in!
streetwise (Diary) Friday, February 20th at 11:58AM EST (link)The Administration is falling down on its most important economic duty- bolstering confidence.
Which will return when
djemi (Diary) Friday, February 20th at 12:05PM EST (link)the market knows how much money is on the playing field, what and where the government share is coming from.
“If I can’t shoot rabbits,then I can’t shoot fascist”
“With age, comes Wisdom, but only if you are paying Attention, son” my ‘Old Man’
RS Help files (h/t JLenardDetroit) Grassroots in Michigan
Moes Strategy
We could easily go down big from here.
Old_Crow (Diary) Friday, February 20th at 1:05PM EST (link)I have never seen my trader friends so pessimistic, never even close. More and more people are closing their mutual funds and with much, much less money in play. The eventual recovery in 2010 or so will be very slow. There is no reason to be in the market now unless you are an experienced trader with a high risk tolerance (or shorting). We are no where near the bottom yet.
“Enlightened statesmen will not always be at the helm.” — James Madison
I think we could see 5500 or worse.
Vegas_Rick (Diary) Friday, February 20th at 1:30PM EST (link)I’m a part-time day trader and I have never seen the lack of confidence in the markets that we are seeing now.
“God is great, beer is good and people are crazy.”- Billy Currington
“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race.” Calvin Coolidge.
Optimism, optimism, optimism....
texas214 (Diary) Friday, February 20th at 12:06PM EST (link)As Republicans/Conservatives it has to be our belief and goal that the American spirit is greater than any left leaning, fear mongering, incapable President or Congress. The American public is beginning to realize that Obama/Pelosi/Reid are not going to bail them out and that we are going to have to take personal responsibility for our situation.
Just as yesterday with CNBC’s Rick Santelli “Chicago Tea Party”. It wasn’t about anger, hatred or fear, but cocern of lack of optimism that the American economy and free market system will solve the problem, not government solutions.
Frank Langone, founder of Home Depot, was spectacular on CNBC this morning; worth a watch, especially the last few moments.
http://www.cnbc.com/id/15840232?video=1040944991&play=1
Optimism? You're Kidding, Right?
Spartan4Life (Diary) Friday, February 20th at 12:16PM EST (link)We have no power.
They are taking us down a rathole and there is nothing we can do about it.
They've changed the rules texas214
Vegas_Rick (Diary) Friday, February 20th at 1:32PM EST (link)They won’t LET the economy recover. They haven’t created enough permanent nanny staters yet.
“God is great, beer is good and people are crazy.”- Billy Currington
“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race.” Calvin Coolidge.
yeah, I am also from Texas, but got to say...
kyle8 (Diary) Friday, February 20th at 2:39PM EST (link)not so much optimism here, Things gonna get a whole lot worse before they get any better.
“Nothing works like freedom, Nothing succeeds like liberty”
Kyle
While this is not the most optimistic period
texas214 (Diary) Friday, February 20th at 3:11PM EST (link)We should show optimism in the American system. Who showed better leadership in a moment of deep national recession; Obama’s “catastrophic” comments, or Reagan’s “Shining City on aHill”.
We should point out how destructive and negative to the American psyche Obama’s policies are vs. Reagan’s optimict view of Americans. Our optimism that if you let “Americans be Americans”, not leftist Eurosocialist, we will get through this and lead an recovery.
im not sure that we have an AMerican system left
kyle8 (Diary) Friday, February 20th at 3:30PM EST (link)And I am serious about that. The looters have finally outnumbered the producers, or at least they will by the end of this administration.
“Nothing works like freedom, Nothing succeeds like liberty”
Kyle
texas214, you can call this Congress and president incapable, but
janis (Diary) Friday, February 20th at 3:18PM EST (link)from where I sit, they are alarmingly capable!!!!! They have managed to implement a good many things that they’ve wanted to do for decades and they have still more on the way.
If they were any MORE capable, we’d be part of the old Soviet Union by next Friday at noon.
Down about 150 points at mid-day
The_Gadfly (Diary) Friday, February 20th at 12:52PM EST (link)so, it looks like you might be right on the mark with your prediction. Which is why I keep reading your stuff.
No reason for Q1 optimism
lapert Friday, February 20th at 2:01PM EST (link)I’ve spoken with CFOs at most of the S&P 500, I wouldn’t expect Q1 earnings to outperform forecasts if I was you.
My guess (and that is all anyone has) is that we may see results pass expectations in Q3 if we are lucky.