Friday, August 10, 2007


The Dow was done as much as 220 today, then recovered all its losses and was up as much as 36 points. Now it's down again by 41.

The Fed tried to soothe investors
by opening the "discount window" to "provide reserves as necessary" to take of liquidity problems.

It worked for a while. Now the market seems to be sliding again.

Ordinarily I would expect the market to finish up after a day of big losses like yersterday's. But given the fast and furious pace of mortgage/liquidity news, it may be that many investors do not want to be holding much going into the weekend just in case something really bad breaks while the market is closed.

The last hour of trading (or as has happened lately, the last half hour) will tell.

UPDATE: Dow got back down triple digits, now is down 71 (as of 2:08 PM.) Federal Reserve injected money into the system for a third time today.

SECOND UPDATE: Barry at Big Picture says the combined liquidity injections of the ECB and the Fed today are larger than the GDP of Argentina.

THIRD UPDATE: Just got home to see the Dow and the S&P up, while the Nasdaq is still down reasonably big. Then the Dow dropped double digits again, now it's up single digits.

The shills on CNBC are crowing about the "resiliency" of the market. They're also crowing about how good the financials look today.

Uh, huh. That's why the Fed had to throw money into the system three times today.

I find it bloody curious that our governments staunchly refuse to regulate poor business practices yet bail the bastards out when they get into the shit.
The bail-out has its own consequences, of course. Like driving investor fears.
Thanks for the point, cartledge - I put it into a post.
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