Monday, October 01, 2007

All Is Well


NEW YORK (MarketWatch) -- U.S. stocks rallied Monday, pushing the Dow to record heights to start off the fourth quarter, as Wall Street showed optimism after Citicorp warned of a steep drop in profits that the worst of the credit crunch is over and that further interest-rate cuts are ahead.


After crossing the 14,000-level for the first time since late July early on, the Dow Jones Industrial Average more recently rose 193.3 points to 14,088.9, after hitting a record high of 14,1115.5 earlier on.


"Investors are making a decisive bet on Corporate America. The optimism is based on the view that earnings can improve and support higher share prices despite all of the problems that created so much volatility during the summer," said Frederic Ruffy, analyst at Optionetics.


A gauge of manufacturing activity came in below expectations, but investors appeared to brush the news aside, with the major indexes only adding to their gains after the Institute for Supply Management released its manufacturing index for September. The measure registered a reading of 52.0%, down from 52.9% in August. See full story.

The ISM measure "suggest that the factory sector is so far holding up well in the wake of this summer's financial turmoil," said RBS Greenwich Capital analyst Michelle Girard.

If things are so great with the economy, I wonder why it is Wall Street wants more rate cuts later this month and in December when the Fed meets?

Oh, yeah - CHEAP MONEY!!!!!!!!


The bubbling continues.

Dow 16,000? Nasdaq 3000? S&P 2000? $100 oil? $1000 gold?

Just keep printing the money and keep tossing it out there.

All is well!!!

Printing money? Are you sure you are an educator?
See Ron Paul on "printing money," Lysander.

Great article I read today pointed out the inherent contradiction in the thinking. Point 1) The "crisis is overblown, and all is well." Point 2) The Fed will cut again in October.

So, if all is well, why would the Fed cut again?

Irrational exuberance all over again.
Irrational indeed - the WSJ wondered in print yesterday whether ANYTHING could derail investor optimism and the bull run.

And of course the answer - yes, but it already didn't happen. If the Fed had left rates alone in Sept, the markets would have tanked and investor confidence would have been shaken as they would have started to realize there was no Bernanke put. But once Uncle Ben bailed them out w/ 50 bps, they have no fear. They know the Fed will print money as fast as it can to help out the greedy little bastards.

Remember, bailouts are only for Wall Street!
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