Wow...look at the Dow now...up 400 points

[Roxy66]

this is crazy. I hope it keeps going up.

[eshfemme]

1. Is there supposed to be any specific reason it's going up?

I'm wondering if the bailout worked. But I'm really afraid about the rumblings of other financial institutions possibly being in danger... plus, the de-regulation that made this possible still haven't been addressed yet. I don't trust the people who fucked us over to have learned their lessons and to know their limits.

[Teaser]

2. What do you mean "bailout worked"?

It allows AIG to continue functioning and to unwind its debts. I guess that "works". What else are you expecting from it?

[eshfemme]

3. Supposedly, the bailout was supposed to prevent any further collapses of other financial institutes

My feelings about the Bush administration aside, I really don't want to see our economy collapse any further but I have no idea if the bailout does anything else other than make sure AIG doesn't collapse-- I don't know if it prevents other collapses. So I was just wondering what prompted the Dow Jones to jump up, at least according to the OP as it sounded like some sort of miraculous recovery, and wondering if it was the AIG bailout that prompted it.

[Teaser]

4. Oh, it's far too early for that assesment.

There will have to be many more bailouts before this thing is done.

Today's rally was because there is a rumor that the federal government is going to set up a big fund to help large lendors with their outstanding debt.

[PolNewf]

5. There are\were rumors that something big (bailout) is happening tonight

DOW shot up like crazy once the rumor was leaked.

[gmoney]

6. Yeah, that the gummint is going to form an agency to absorb bad debt...

Socializing failure without penalizing those who were privately rewarded most generously.

[Major Hogwash]

11. And give the bill to us.

They didn't just socialize failure, they socialized risk.

In-fucking-credible.

[Skidmore]

7. Amazing what a photocopy machine in the back of the Treasury and

a few big bills can accomplish. They printed more money. Paper. Ooga boooga. Shazam! That piece of paper is worth $100. Now, if you and I try that, we'll go to prison for counterfeiting. Same principle but different outcomes.

[Median Democrat]

8. Sadly, It Just Appears To Be Rumors Of A New Resolution Trust Corp, But...

Its not that simple. This problem is far more complex than the S&L crisis. The securities at issue are much more complex, and less transparent, which is part of the reason why so many banks are going down. There is no way to assess exposure. Ultimately, the taxpayers can be left holding the bag on a much larger liability while banks get to clear their books.

Its a great for market swings, but once the possible deal is analyzed, and the affect it will have on the budget deficit (huge increase), this could cause the dollar to plunge, which will cause oil to rise, which will cause the DOW to plunge ... again.

[ProgressiveEconomist]

9. IMO, it's rumors of an unspecified "RTC" to "socialize" corporate financial losses

Details have not emerged yet, but I doubt sincerely that Congress would pass legislation enabling the kind of "RTC" solution Jim Cramer advocates. (See http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=7111316&mesg_id=7111791 ).

I predict that, when details of proposed bailout legislation start to leak out, it will become clear that many more financial stocks will go to zero. That won't be good for the Dow and especially for the S&P 500.

[AkFemDem]

10. Obviously investors are reacting to the positive Obama polls! Lets hope both keep climbing.

[Captiosus]

12. And CNN, at the close of the market, basically

Acted like the whole crisis was over and we could go back to running up our credit cards now.

"The worst two days this year has been followed by the best single rally of the year!"

Direct quote from their financial reporter on the floor.
Can't remember her name.