Daily Kos: Dow at 12,000: Obama must really be a socialist now

Swwep the Street

Steve Kyle at AmericaBlog has a long post on the benefits (financial, economic, and psychic) of reigning in the obscene profits (for basically doing nothing) of Goldman and their ilk. Being an investor, and primarily in the instruments in question (deriviatives), I'm leery of over-regulation (or random regulation)

But since the 'repeal' of Glass-Stegall in 99, the proitability of the majors has skyrocketed, primarily on the creation of ether, and the stability of the market has plummeted. Market efficiency has been shown to be an elusive dream in the face of obscene short term profits. Who cares if the market crashes next week, if I can get my 1.5 billion today- it'll still be worth a half billion afterwards BOOHOO

So this is one case where I'm all in favor of regulation, even if it may hurt me in the short run. This has to be reined in, or the idiots on the Street will destroy the system.

I think he sums it up well when he says "I, for one, would be very happy with less efficiency but more stability." Amen.

Yikes!

Oh dear God! I tend to agree with this (and Roubini is usually right), but it's scary to hear him put into words (and words and words and... he's verbose) We've heard from Krugman, now Roubini, can Taleb be far behind?

Branching Out

Due to overwhelming demand (cue snark machine), I'm going to start an investing blog tomorrow. This is more closely related to what I do for a living, altho what I do is more trading/speculating. The blog will touch (very) lightly on the trading side, but concentrate more heavily on heavily on investing. This thing will continue too!

Wish me luck! :)

Oh Hush

I like playing the 'oh look what (fill in the blank) said today that crashed the market' game as much as anybody. But it really is just a game. I'm getting a little tired of seeing/hearing it in serious reporting.

Now, I'll be the first to admit that Hank Paulson is big tool, but his remarks today did not really affect the market. More than half the drop today came at the open, and the market pretty much just drifted south the rest of the day, including before, during, and after his remarks. As has been the tendency recently, a big chunk of the movement came in the last hour (or some days, the last five minutes!!) He is useless and quite possibly counter-productive, but cut him some slack. He's not moving the market. That's the morons on the street!

Amen Corner

I'm not the biggest Cramer fan in the worled, but his comments, recorded in Stan Yee's post here, echo my thinking. Two of the best things Obama can do to right the sinking ship of Wall Street are get rid of Chris Cox, head of the SEC, and bring back the up-tick rule.

Bottom line: "You want order restored, the markets to work again, an end to the endless sowing of fear? Then bring back the rules we put in place to avoid another Great Crash. The uptick rule wasn't broken, but the SEC 'fixed' it and put the 'fix' in for the shorts. It's time to give the longs back a level playing field, stop the rigging of the market by the shorts, and bring capitalism, not capital destruction, back to our markets."

I've posted (below) on the need to re-regulate and Cramer just reinforces my opinion there, on the up-tick rule. Chris Cox is Reagan-Republic, Laffer Curve, trickle-down, cut-the-tax kinda guy; just what we DON'T need in the current debacle. As with most Bush appointments, he was long on Bushie dogma and short on clues.

Bush Economic Note

The Dow closed today (finally! that was ugly to watch) below the level it held when Shrub took office. Better living through Republicanism.

When will we all realize that the Repugs know less about economics than they do about family values?

Market Meltdown

The stock market fell further today, down over 350 points. I think most of this is due to credit problems engendered by the housing problem, but I think a lot of it is an outgrowth of the overall economic malaise that seems to affecting everyone in this country with an income under (random number...) $100,000. The benefits of the explosive growth in corporate profits and market growth have channeled to a very small group, and have been, if not primarily, then largely, at the expense of EVERYONE else. Wage growth in real and current terms is nil, if not negative. Benefits are being slashed, if not eliminating. The bankruptcy bill screwed everyone with financial woes, except the banks (good news, debtors! the banks may be out of business before you are!)

I don't see any short term relief from the market meltdown (there may be help for the mass in the middle if the Dems win big next year, tho!) In a previous life, I followed the markets closely and all my indicators/tracking models are pretty negative, so I just don't hold out any short term hope (my main long term model has been negative since the early nineties, so take that with a grain of salt (or prepare for a monumental crash! ;) )) In the long term tho, the only two places to be invested are in the stock market and real estate, so remember, every crash is someone else's buying opportunity (reason #1 that the RICH get richer.....)