Monday, October 06, 2008

Delaying the Freefall

After the 'bail-out' vote Friday, the NYSE dropped around 400 points. This morning, in the first hour of trading, the NYSE was down over 500 points. When the first bailout vote failed, the market only dropped 800 points before turning around. Since the bailout passed, the market has lost almost 1000 points.

Liquidity is what this bail-out was supposed to provide. It seems like liquidity is still coming in the form of selling stock. There have been rallies, but the rallies continue to be followed by larger drops.

The author of this blog is no stock trader. Obvious to anyone, though, is that fact that the 'bail-out' has had no real immediate positive effects, as promised. Now, of course, they will say that things are going to get worse before they get better.

Things are going to get worse, no matter what.

Maybe the bailout has patched a few holes in the economy, but it has poked more holes than it patched. 700+ billion more of them, as a matter of fact.

The DOW will probably rally to around 10,000 again. Confidence will go back up. Then, right when it's least expected, the bottom will drop out.

0 Comments:

Post a Comment

Links to this post:

Create a Link

<< Home