Dow back over 8000

[I spent the winter writing songs about getting better]

Damn Obama and Geithner and their disastrous policies!

[k-onmmunist]

Yes, because this was really anything to do with Obama and Geithner -_-

[I spent the winter writing songs about getting better]

Yes, because this was really anything to do with Obama and Geithner -_-

They probably have more to do with it than the effect of a bill signed in mid-February on the March unemployment numbers.

[Eraserhead]

OBAMA POWER

[Fmr. Pres. Duke]

This pleases me. Up 4% today again and everything in my portfolio is green.

[Sam Spade]

I'm feeling that we're somewhere around a short-term top today.  There is massive resistance above where we are right now and there are tons of internal divergences at present.

OTOH, some other news/articles have come across the wires today that makes me think that a total economic collapse is even more likely to occur down the line (among the mess of options available).  Guess it's time to start preparing as such.

[Mint]

OTOH, some other news/articles have come across the wires today that makes me think that a total economic collapse is even more likely to occur down the line (among the mess of options available).  Guess it's time to start preparing as such.

I've agreed with all your analysis thus far so...

What would you say the window is for withdrawing from the system totally?

[Beet]

In volatile years, the market has frequently rallied in the spring (1997, 1998, 2002, 2007, 2008), topping in May or August/September only to fizzle out later in the year. I truly expected no such rally this year, because I expected the economic news to he a steady drumbeat of gloominess. With near free fall in world trade, the jobs market, and manufacturing, and the bulk of the financial difficulties not over, we have a lot further to go before we are out of the woods.

The G20 agreement on 'competitive currency devaluations' could be a mistake. First of all, this is going to cripple the UK's and potentially the US's quantitative easing policies, if enforced. These policies are not really 'competitive... devaluations' so much as desperate attempts at inflationary macroeconomic policy... which many economists are saying are badly needed. If the side-effect of QE is a devaluation which makes a country's currency more competitive... then that is the needed adjustment which must occur.

Second of all, if enforced in the current-account emerging markets of Central and Eastern Europe, it merely raises the probability of default. Of course the EU must committ to bailing out these countries in any case.

I hope that this agreement does not have the implications I am subscribing to it. If it did, I am incredulous about why policymakers in the traditionally current-account deficit countries would agree to such a thing.

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Which items?

[Sam Spade]

In volatile years, the market has frequently rallied in the spring (1997, 1998, 2002, 2007, 2008), topping in May or August/September only to fizzle out later in the year. I truly expected no such rally this year, because I expected the economic news to he a steady drumbeat of gloominess. With near free fall in world trade, the jobs market, and manufacturing, and the bulk of the financial difficulties not over, we have a lot further to go before we are out of the woods.

Well, the market has regained about 60%-65% of the value in the past month that we lost in the first two months, so yes a rally *did* happen, of sorts.

And yes, I've noticed this pattern too. 

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Which items?
[/quote]

The way the Fed bought Treasuries today (on-the-run securities, as opposed to off-the-run securities) and the speed with which they're using the allocated 300 billion.  The fact that Dresdner Kleinwort dropped from the Fed's primary dealers - which leaves 15 left.

A few other stories that are much more worrisome and deserve to be posted separately.

[Lunar]

recession over.

[Sam Spade]

Cramer already said the depression was over today.

Henceforth, my top call. (for the time being)

[k-onmmunist]

Wait, it's not over... how do we know?

[Beet]

The way the Fed bought Treasuries today (on-the-run securities, as opposed to off-the-run securities) and the speed with which they're using the allocated 300 billion. 

Yes, they are using the allocated $300 billion for 6 months very quickly. At a rate of $7.5 billion/day, they will run out in 30-40 business days, or 6-8 weeks.

The Fed seems to be targeting on-the-run throughout the buying cycle. It seems that on-the-run has a greater effect on consumer borrowing rates. In any case, American consumers are not going to be massively increasing their indebtedness regardless of the going rate. The best that can be hoped for is a moderate adjustment to a higher savings rate of 6-8% while the global economy readjusts. In the long run, consumers in current account surplus countries such as Germany, Japan, and emerging markets are in a better position; American corporations and oil exporters should also be in a better position investment-wise.

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Can you explain the significance of this? It seems Dresdner Kleinwort suffered a huge loss in 2008 and is coming under new ownership by Commerzbank, which has decided to scale back Dresdner's operations... and the Commerzbank CEO who made the decision to purchase Dresdner is coming under fire. Other than that I can find no insight into DK's decisions, or why new primary dealers have not come on board to replace the losses of the last year. Supposedly the Fed is in talks.

[Torie]

I'm feeling that we're somewhere around a short-term top today.  There is massive resistance above where we are right now and there are tons of internal divergences at present.

OTOH, some other news/articles have come across the wires today that makes me think that a total economic collapse is even more likely to occur down the line (among the mess of options available).  Guess it's time to start preparing as such.

Hey, Sam old chap, with the world now printing currency like the way BRTD puts up polls, is there any reason why I shouldn't be loading up on 4.5%-4.75% 30 year fixed interest mortgages?  Ya, I know about the AMT beast for refi interest (it ain't deductible for AMT purposes), but didn't our president say he didn't like the AMT or something?  

[Joe Biden 2020]

This pleases me. Up 4% today again and everything in my portfolio is green.

I'm all green, too.  My company stock is up nearly 4%, one mutual fund up a little over 2% and another mutual fund up almost 6.25%  In fact, the stock is up nearly 6 points since its low of $18.19 on March 9.  It closed at $23.95 today.  Although, I bought my first share when it was nearly $28 on Feb 13.

I'm beginning to think we're coming out of the deepest, darkest pocket of the woods, but we still have a LONG way to go.  The only thing I'm concerned about it is our children and grandchildren will be paying for it.  That stimulus package and other trillions of dollars will come out of the next generation's pockets.  Although, an argument can be made that the debt would be worse if we had done nothing.  I subscribe to that argument, but it was picking the lesser of two evils.

[Queen Mum Inks.LWC]

I said this when the DOW fell.  I'll say it again now - the DOW really isn't that important.  It's only 30 companies.

[Fmr. Pres. Duke]

There is tremendous resistance at the 8000 level in the DOW. We see it down today while the NASDAQ is in the green by double digits. The tech sector seems like a nice place to put some money for the short term, but I am slowly converting things to cash right now as I feel any time now, we could see the leg back down to 6500. Unemployment is up to 8.5% and we continue to bleed jobs.

[Fmr. Pres. Duke]

And with that, we're back above 8000. Let's see if we close above that level.

[opebo]

I'm feeling that we're somewhere around a short-term top today.  There is massive resistance above where we are right now and there are tons of internal divergences at present.

OTOH, some other news/articles have come across the wires today that makes me think that a total economic collapse is even more likely to occur down the line (among the mess of options available).  Guess it's time to start preparing as such.

Hey, Sam old chap, with the world now printing currency like the way BRTD puts up polls, is there any reason why I shouldn't be loading up on 4.5%-4.75% 30 year fixed interest mortgages?  Ya, I know about the AMT beast for refi interest (it ain't deductible for AMT purposes), but didn't our president say he didn't like the AMT or something?  

You're supposed to be an elderly, responsible, moderately wealthy man and you're asking that madcap for investment advice?  In the first place he knows nothing, and in the second every dime he suckles from the parental teat comes (as does my own) from precisely the policies he decries.

Btw, what do you mean, you want to be buying mortgages or you want to take out some mortgages?  From the expectation of inflation implied in your post I presume you meant borrow some money on some properties you have.  But please do keep in mind that deflation is still quite likely.  As you can see above people are talking about the Fed 'going through' '300 billion', 'sooner than expected'.  This kind of talk shows an economic mentality that totally fails to grasp the situation - putting limitations on printing, or 'setting amounts' is absurd. 

The Fed should be printing vastly more than 300 billion, and it should be in creative, unpredictable ways, focusing on getting the money to those who will spend it. For example just dropping bales of money into poor neighborhoods.

[Sam Spade]

I'm feeling that we're somewhere around a short-term top today.  There is massive resistance above where we are right now and there are tons of internal divergences at present.

OTOH, some other news/articles have come across the wires today that makes me think that a total economic collapse is even more likely to occur down the line (among the mess of options available).  Guess it's time to start preparing as such.

Hey, Sam old chap, with the world now printing currency like the way BRTD puts up polls, is there any reason why I shouldn't be loading up on 4.5%-4.75% 30 year fixed interest mortgages?  Ya, I know about the AMT beast for refi interest (it ain't deductible for AMT purposes), but didn't our president say he didn't like the AMT or something?  

Well, if you have an ARM, obviously you want to refinance.

If you already have a fixed, a lot depends in my mind whether the new fees/interest + principal are greater than what you would pay presently over the term of the loan and whether the residence is principal/secondary or whether it's a rental.

Also, you need to ask whether you need to raise cash now AND how secure your job actually is (I'm assuming fairly secure), because things will get worse.

So that's a lot of questions.  But, in the end, I really doubt mortgage rates will get lower than this for a long, long time, so this is the time to refinance if you really want to.  

[Sam Spade]

And with that, we're back above 8000. Let's see if we close above that level.

Looks like we will due to a typical end-of-day pump on light volume.

Ben's slowly but surely losing control of the bond market though.  The gap from the QE announcement on the ten-year is getting very close to filling.

EDIT:  It's another good opportunity to take your profits for now, my gut tells me.

[Torie]

It appears to be a no brainer to me actually. The costs are about 1% for residences and vacation homes, and 3% for income property. The rate drop would be about 1%, so you break even pre tax in about 3.5 years for income property, and a bit over a year for the residences.

I work about half time as a kind of avocation at this point. I had a rather high savings rate. If consumers were in general like me (at least until recently when I started to substantially accelerate my spending), the US would be in a permanent depression.

[Torie]

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That "sounds" fascinating. Pity I have no idea what it means.

[Sam Spade]

It appears to be a no brainer to me actually. The costs are about 1% for residences and vacation homes, and 3% for income property. The rate drop would be about 1%, so you break even pre tax in about 3.5 years for income property, and a bit over a year for the residences.

If you've done the math and it works better, then do it.

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We're getting there.

[A18]

I had a rather high savings rate. If consumers were in general like me (at least until recently when I started to substantially accelerate my spending), the US would be in a permanent depression.

No. Either investment (direct or indirect) would increase proportionately, or prices would fall until markets cleared.