Monday, November 24, 2008

The Economy

Obama is doing a pretty good job at putting together his economic team. The free-marketers of Wall Street seem to really like his selections of Geithner as Treasury Secretary and Summers as Top Economic Advisor, as evidenced by the late day rally on Friday (which was really building up on a technical basis in the charts prior to the announcement) and the higher futures this morning. Not only are they centrist, but it's taking away uncertainty in these very uncertain times. Also, overnight, the government announced they will be bailing out Citigroup with a complex deal.

The script for the democrats and Obama can't get much better as far as drama and credit goes. Fairly or unfairly, Bush will go down in history as being the leader of the U.S. as it entered its 2nd greatest recession of all-time. He will also be remembered for socializing most of the banks and investment firms, and potentially for bailing out the automakers. Obama will come out looking as the "savior" as the economy will emerge (with or without his help) much stronger in the next 2-4 years. It's kind of ironic.

Watch the market today. It is an important day. There haven't been 2 big up days in a row in a very long time. If the market can tack on 4-6% today, then it would probably signify that a meaningful intermediate-term rally will take place (could rebound 30-40% from these levels). It actually wouldn't even be bad if the market went into negative territory after the higher futures, as long as it finishes up strong. It's all about the close and the last hour.

5 comments:

Don said...

In 12 months, the economy will be improved, the Iraq War will be over, and it all be because of the Obamessiah. I am already thanking him this week.

Anonymous said...

the messiah. haha.

Anonymous said...

where are all the religion rants about the catholic church? miss the radicalism. really, i wonder about peeps. sadly, there is no personal accountability. i mean, do you work on a farm? do you dribble a hockey puck? i am missing the anti-church rants. is this proper labor use?

kath said...

I agree with Steve that the timing for the Democrats couldn't be better. While he didn't weight in on his opinion of the fairness of judgement on Bush, I do think a lot of the economic crisis is, of course, multifactorial but really, really bad timing. With or without the Iraq war, I think we'd be in this current financial crisis. People have been living beyond their means for so long now! Living in homes too big, cars too expensive...everyone was able to keep up with the Joneses who were getting more and more gluttinous. All with the magic of home equity loans, excessive and easy credit card debt...it was bound to happen.

Anonymous said...

kath, you are 100% spot on regarding this mess. people were fsically stupid and it has come back to bite them in the a$$. you reep what you sow. the bailout sucks.