The image says it all. I’d like to think that after 35 years of being involved
with markets that I’d seen it all, but today is one for the record books.
We start out the day with “men at work” from Bernanke to Paulson.
They’re an interesting pair that’s for sure. But, talk will only get you so far.
Given the condition of FNM and FRE combined with Paulson’s breezy attitude you’d
be right to assume that these firms will, for all practical purposes, be
nationalized. Another bite in your wallet and a brush-off to Moral Hazard
concerns.
Oil was up around a dollar while stocks were struggling higher
most of the day. Then, out of the blue, oil shot up $3 and stocks started to
cave. At their nadir indexes were sharply in the red as oil hit $5. But, in the
end, that too got the brush-off as bulls stormed the futures market and got some
buy programs going. Now, I know what many of you are thinking--the PPT [Plunge
Protection Team, dba The President’s Working Group on Financial Markets] at
work. And you know something? I wouldn’t be surprised since there wasn’t a
reason for the rally and this government is determined to do whatever it takes
to keep things rolling along. Let’s just say, it was a day for the
professionals.
In the meantime, here’s how some prominent financial
companies closed. And, as you view them ask yourself if overall stock indexes
can rally with these prominent companies in the ICU.
FRE 7.95 -22.47%
LEH 17.23 -12.72%
FNM 13.02 -14.99%
WB 12.98 -9.17%
BAC 22.17
0.50%
Volume was again heavy due to program trading activity by [ahem]
institutions. I don’t think there are many individuals tossing money over to
their brokers in this environment. We also have two gifted blog readers
assisting us with straightening out Yahoo/Finance’s reporting. It may be worse
than dealing with a government bureaucracy but what the hell, it’s worth a shot.
Here’s YHOO’s data for today. You can see breadth was just so-so.
You can tell by watching the intraday action that
institutions are dominating the action. I’m not referring to large registered
investment advisors or your local bank trust department either. Nope, this is
action from WS trading desks, hedge funds and perhaps even our “activist”
government. So, remember when action becomes this chaotic and inexplicable it’s
Da Boyz just doing their thing. They care not about fundamentals or anything
else since they’re just living in the moment and can turn things on a dime.
I remain incredulous perhaps like you but impressed by the results of
their actions.
Anytime you read a headline heralding a bear market you
might as well expect things to go the other direction if only temporarily.
Have a pleasant weekend.
Disclaimer: Among other issues the ETF
Digest maintains long or short positions in: SPY, SDS, MZZ, IWM, TWM, QQQQ,
QLD, XLY, SCC, XLI, SIJ, IYR, SRS, GLD, DBP, DBA, DAG, EFA, EFU, EEM, EEV, IEV, EWZ, RSX, FXI and FXP.
