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  1. #1
    ding ding ding
    Spin's Avatar
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    U.S. Stocks Rally as Obama Picks Tim Geithner to Head Treasury

    Nov. 21 (Bloomberg) -- U.S. stocks rose and the Standard & Poor’s 500 Index rebounded from an 11-year low after President- elect Barack Obama picked New York Federal Reserve Bank chief Timothy Geithner to head the Treasury.

    “This news could really give the stock market a badly needed shot in the arm,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, wrote in an e-mail to clients. Geithner is a “fantastic choice to help lead the financial markets out of the wilderness.”

    Citigroup Inc. pared a 35 percent slide and JPMorgan Chase & Co. trimmed a 16 percent tumble after a Democratic aide said Obama will nominate Geithner to replace Henry Paulson. National- Oilwell Varco Inc. and Chesapeake Energy jumped more than 12 percent as crude advanced for the first time in six days. The rally in the S&P 500 came after this week’s rout dragged its price-to-earnings valuation to the cheapest since 1995.

    The S&P 500, which is poised for a third-straight weekly decline, gained 5 percent to 790.29 at 3:38 p.m. in New York. The Dow Jones Industrial Average rose 392.1 points, or 5.2 percent, to 7,944.39, while the Nasdaq Composite Index added 3.6 percent to 1,363.44.

    Benchmark indexes swung between gains and losses earlier as growing concern over the survival of Citigroup Inc. offset a rally in commodities producers.

    The S&P 500 extended its 2008 slide to 49 percent yesterday and was poised for the worst annual decline in its 80-year history after economic reports depicted a deepening recession and lawmakers postponed a vote on a plan to salvage the auto industry. Citigroup, which has about $2 trillion of assets, has fallen for nine of the last 10 days on concern more companies and consumers will default as the economy worsens.

    2008 Tumble

    This year’s tumble in the S&P 500 dragged down 97 percent of its stocks and all 64 of its so-called level-three industries, groups such as “distributors” and “leisure equipment,” as of yesterday’s close. More stocks decreased in the current bear market than in the 49 percent rout after the technology bubble burst in 2000.

    Alan Greenspan can stop worrying about “irrational exuberance” in the U.S. stock market, 12 years after he warned investors that share prices were rising too fast. The S&P 500 fell below 744.38 today, its closing level on Dec. 5, 1996, the day then-Federal Reserve Chairman Greenspan used the phrase in a speech on “The Challenge of Central Banking in a Democratic Society.”

    The S&P 500 was trading for 20.7 times earnings when Greenspan gave his warning and its valuation climbed to as high as 62.9 in March 2002, according to Bloomberg data. The index was valued at 16.3 times reported profits of its companies at yesterday’s closing level, the cheapest since 1995.

    The S&P 500 has tumbled 13 percent this week. The Dow average has declined 12 percent, while the Nasdaq Composite Index is down 14 percent.

    From Bloomberg.com

    I think this is a great selection and one that is welcomed on Wall St. The guy is smart thats for sure, I've often cringed as Paulson has stuttered his way through all kinds of important announcements. The guy just didnt inspire any confidence at a time when it was needed.
    This is the first major move by Obama and I'm impressed.
    Originally Posted by Smeg
    ... I like to fantasise sometimes, and I lie very occasionally... my superior home, job, wealth, freedom, car, girl, retirement age, appearance, satisfaction with birth country etc etc... Over the past few years I have put together over 100 pages on notes on thaiophilia...

  2. #2
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    Butterfly's Avatar
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    unbelievable,

    Paulson is showing himself as a typical lying bullshitter investment banker,

  3. #3
    Days Work Done! Norton's Avatar
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    Quote Originally Posted by Spin
    This is the first major move by Obama and I'm impressed.
    A good pick and the market is an emotional response to his selection. The gains will be short lived however as nothing has changed in the fundamentals driving the market down. Expect the gains will be lost in next weeks trading.

  4. #4
    Days Work Done! Norton's Avatar
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    Quote Originally Posted by Spin
    I've often cringed as Paulson has stuttered his way through all kinds of important announcements.
    Typifies the complete lack of leadership skill displayed by all segments of the current administration. No thought, plan or inspiration. Only reaction to self made crisis.

  5. #5
    disturbance in the Turnip baldrick's Avatar
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    Quote Originally Posted by Butterfly
    Paulson
    that poor bastard was told to fix the unfixable

    Quote Originally Posted by Norton
    A good pick and the market is an emotional response to his selection.
    stock markets run on emotion not cold logic which is the underlying problem.

    until employment starts its upward movement again this is all just a cabaret .

  6. #6
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    Quote Originally Posted by Norton
    Expect the gains will be lost in next weeks trading.
    it's going to be like that for a while, needs to get used to it

  7. #7
    Thailand Expat Texpat's Avatar
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    But in typical US media style, the headline infers a connection.

  8. #8
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    Quote Originally Posted by baldrick
    that poor bastard was told to fix the unfixable
    I disagree, it was easy to fix. Give financial companies the option to use historical cost in their reporting, hence giving them room for maneuvering their liabilities. It wouldn't have cost a dime. IASB already gives those reporting exception when there is an exceptional situation, so that would have made sense.

    Quote Originally Posted by baldrick
    stock markets run on emotion not cold logic which is the underlying problem.
    not always, fundamentals usually lead the game, but when it's panic or bubble time, then there is no end to human stupidity, think herd effect and a falling ravin.

    Quote Originally Posted by baldrick
    until employment starts its upward movement again this is all just a cabaret
    unemployment figures is not really a direct factor in stock market performance, it's more important for Fed actions and Fiscal policies. Investment is not going to return because there is a drop in unemployment. Unemployment is a lagging effect, not a leading indicator.
    Last edited by Butterfly; 22-11-2008 at 05:54 PM.

  9. #9
    Days Work Done! Norton's Avatar
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    Quote Originally Posted by Texpat
    But in typical US media style, the headline infers a connection.
    Ridiculous and predictable as is per their modus operendi.

  10. #10
    Thailand Expat

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    This ship will have to sail its course no matter who's at the wheel.

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