Dow Jones Industrials set to open significantly higher Monday, futures predict-worst of crisis over?

[Politics_Guy25]

http://www.bloomberg.com/markets/stocks/futures.html

Dow presently set to open up 260 points, a substantial move to the upside and it proves that the markets are very encouraged indeed by the moves taken by the EU 15 and the G8 summit meetings in Washington, D.C. this past weekend.

Dare we say that the markets are stabilizing and that the worst is over? The crisis is now passing?

Of course, we are in for substantial job losses, a deep recession and much pain but the markets are always a LEADING indicator of when the economy will rebound and perhaps we are seeing a rebound being projected?

Of note, the Dow had a remarkable recovery on Friday afternoon as well. The sharply higher opening tommorow if it occurs combined with today's futures combined with the G8 and EU action are highly encouraging indeed and makes me think that it *may may may* be time to breathe a deep sigh of relief.

[rockymountaindem]

1. Isn't tomorrow Columbus Day?

[Politics_Guy25]

Yep-but it is not a market holiday-one of two federal holidays that aren't

So the markets will be open on Monday.

[A HERETIC I AM]

18. Stock Market is open but the Bond Markets are closed.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=45764&mesg_id=45764

[Mojambo]

2. Yay! We've saved an utterly corrupt and dysfunctional system! n/t

[SharonAnn]

20. Don't be too sure. It may be a "dead cat bounce".

[scheming daemons]

23. Gotta keep the economy afloat a little longer... then get Obama in to reform it...

[MercutioATC]

3. I'll bet you the Dow remains unchanged tomorrow.

...federal holiday and all...

[Politics_Guy25]

4. Edited

XD. Nope it's open.

[MercutioATC]

5. Yeah, I just double checked. You're right.

My mistake...

[EvolveOrConvolve]

6. Market dynamics are controlled in large part by attitudes

Bloomberg.com is trying to instill confidence in the market players.

Monday may be better for the Dow, but I don't see any long term positives for the market or any of us who have their money invested, wholly or in part, in the stock market.

[alittlelark]

7. The $516 Trillion 'Derivitives Time Bomb' looms

This is years from 'over'


http://www.independent.co.uk/news/business/news/a-163516-trillion-derivatives-timebomb-958699.html

<snip>
The market is worth more than $516 trillion, (£303 trillion), roughly 10 times the value of the entire world's output: it's been called the "ticking time-bomb".

It's a market in which the lead protagonists – typically aggressive, highly educated, and now wealthy young men – have flourished in the derivatives boom. But it's a market that is set to come to a crashing halt – the Great Unwind has begun.

Last week the beginning of the end started for many hedge funds with the combination of diving market values and worried investors pulling out their cash for safer climes.

Some of the world's biggest hedge funds – SAC Capital, Lone Pine and Tiger Global – all revealed they were sitting on double-digit losses this year. September's falls wiped out any profits made in the rest of the year. Polygon, once a darling of the London hedge fund circuit, last week said it was capping the basic salaries of its managers to £100,000 each. Not bad for the average punter but some way off the tens of millions plundered by these hotshots during the good times. But few will be shedding any tears.

[David Dunham]

8. The Dow will likely end up down for the week due to bad earnings reports

[mckara]

10. Plus Tuesday People Can Extract Money from Hedge Funds...

The great unwinding continues. We're barely halfway through this problem.

[aquart]

11. You mean, few of US will be shedding any tears.

Going from millions to 100,000 may mean...dare I say...foreclosure on some very pretty properties.

[Speck Tater]

9. Right now investors and speculators alike don't have a clue what to do.

I don't think anybody knows what's going to happen in the short run. But in the longer run, 6 to 12 months out, things are not looking good for a whole lot of fundamental reasons.

That doesn't mean that investor optimism can't briefly push the market higher, possibly even significantly higher. But in the long run, it's go a long way down to go yet.

IMHO

[aquart]

12. Last time we used our industrial capacity to recover. Seen any?

[alittlelark]

16. We put a good deal of liquid assets into S. American currency and companies.

They have enough degrees of separation from AM/ Euro/ Asian markets to make me feel they will fare better.

[Leopolds Ghost]

13. BREAKING -- Dow set to WIPE OUT Losses of past Friday, futures predict!

[FarCenter]

14. Dow future doesn't matter much -- Look for Monday morning LIBOR

London InterBank Offered Rate is the key.

Will the political leaders exert enough influence over the 16 big banks and the British Banking Association to bring down LIBOR?

If LIBOR stays up, the chaos continues.

[Subdivisions]

21. Last I saw was Friday afternoon it was up to 4.52%. Anything above

that in the morning means we're still in deep shit no matter what the DOW does. Indeed, I expect to see a rush of bargain hunters tomorrow.

[Subdivisions]

26. Kicking. LIBOR rose to 4.75. Credit markets remain frozen, only worse. n/t

[NC_Nurse]

15. People who can afford to want to get into the market when it's low. Those

who are scared will bail the minute things bounce to get their money out with a smaller loss.
It's going to be up and down for a while.

[dixiegrrrrl]

17. Wait a minute....I'm confused.

"They" can predict the Dow will open higher?]

yet

according to this:

IMF Warns Of Systemic Meltdown
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4225777

:crazy:

[javadu]

19. I Hope You Are Right, But

the only thing our country really does better than other countries is manage information (arguable) and consume (not arguable). At some point, we need to actually produce something before this thing is over.

[TexasObserver]

22. JP Morgan-Chase, Citibank, and BOA will likely move up Monday

I suspect those three are leading the futures' BUYS.

Friday each performed well, suggesting insiders already knew what was coming. Given the news Paulson announced Friday after the trading day ended, look for the big three bank stocks to move up Monday.

[Neshanic]

24. Yes, we had the depression over the weekend. This thing is just getting started...

look for say 15 years of nasty stuff.

[TheWatcher]

25. " Dare we say that the markets are stabilizing and that the worst is over? The crisis is now passing

Those who truly believe that this is going to be over in a few weeks may be in for a very ugly awakening, and may not understand the magnitude of what has been and continues to happen.

I think people are too used to seeing things like this happen, then The Men Who Would Be Gods ride in on their White Horses to save the day, start a new Speculative Bubble, and then soothe the Public with cries of "Happy Days Are Here Again! Engorge! Speculate! Shop! Gamble! Dancing Girls! Hurr-ry, Hu-RRRRRY, HURRRY!"

They told you this in 1998.

The told you this in 2001.

They told you this in 2003.

And tomorrow, after a huge unabated Meth Party in the Dow, and The Masters Of The Universe calm the herd with sparkling gains, and The Power Of Bullshit once again takes control of the masses, THEY WILL TELL YOU THIS AGAIN.

They were wrong then, and they are wrong now.

Because each time we have reached this juncture, TPTB have ridden in to "Save The Day" only to have us end up seeing a bigger mess created within 3-5 years.

We cannot go on like this. The endless, viscous cycle of Fake Prosperity and Speculative Bubbles must come to an end, or we are going to come to an end at some point.

If you honestly think with the magnitude of the Crisis that is out there, that this is going to be fixed by a bunch of empty suits in a weekend, then that breath of fresh air in the sigh of relief you are taking in just may be nothing more than another bong hit from the Giant Bong Of Bullshit they have had us all sucking from for so long.

Toke Up if you must.

But I don't think this is over yet.

Not by a longshot.

We can hope of course. But I have seen this movie one too many times to believe that they FINALLY killed Freddy.

There is always another sequel.

[sendero]

27. First of all...

... this is not a crisis of the markets, this is a crisis of the banking system.

Secondly, downturns never go straight down, they zig-zag down.

Thirdly, even if the various bailouts stabilize the credit markets, we are in for a really deep recession at the very least, the damage has already been done and the over-leverages nature of the American consumer has gotten no better.

The good news is it looks like the credit freeze may be thawing, so at least we are not likely to have a total meltdown.

[Subdivisions]

28. LIBOR rose to 4.75. Doesn't look like it's thawing to me.

It was 4.52 on Friday and I keep hearing that, until it comes down, credit will still be frozen.

[sendero]

30. I was trying to put..

.. SOMETHING positive in my post, now you had to go and ruin it. :)

[Subdivisions]

31. Ooops! Sorry, sendero! I'll try to be more cheery =) n/t

[TexasObserver]

34. Yeah, I can't help but think credit markets closed today skews things.

I'm dubious of this rally.

We remain in a recession, with worse times to come, so I don't see how the bottom of this market has yet been reached.

Capitulation? I don't think so. Not yet.

[ProdigalJunkMail]

35. LIBOR was actually worse a year ago this time

it is still high...but i found this interesting...

http://www.bankrate.com/brm/ratewatch/other-indices.asp

sP

[nichomachus]

29. See how accurate the prognosticators were the last time we went through this

1. "We will not have any more crashes in our time."
- John Maynard Keynes in 1927

2. "I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future."
- E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928

"There will be no interruption of our permanent prosperity."
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

3. "No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment...and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding."
- Calvin Coolidge December 4, 1928

4. "There may be a recession in stock prices, but not anything in the nature of a crash."
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

5. "Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929

"This crash is not going to have much effect on business."
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

"There will be no repetition of the break of yesterday... I have no fear of another comparable decline."
- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

6. "This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

"Buying of sound, seasoned issues now will not be regretted"
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom."
- R. W. McNeal, financial analyst in October 1929

7. "The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin."
- Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929

"Hysteria has now disappeared from Wall Street."
- The Times of London, November 2, 1929

"The Wall Street crash doesn't mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before."
- Business Week, November 2, 1929

"...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation..."
- Harvard Economic Society (HES), November 2, 1929

8. "... a serious depression seems improbable; recovery of business next spring, with further improvement in the fall."
- HES, November 10, 1929

"The end of the decline of the Stock Market will probably not be long, only a few more days at most."
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929

"In most of the cities and towns of this country, this Wall Street panic will have no effect."
- Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

"Financial storm definitely passed."
- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

9. "I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

"I am convinced that through these measures we have reestablished confidence."
- Herbert Hoover, December 1929

"<1930 will be> a splendid employment year."
- U.S. Dept. of Labor, New Year's Forecast, December 1929

10. "For the immediate future, at least, the outlook (stocks) is bright."
- Irving Fisher, Ph.D. in Economics, in early 1930

11. "...there are indications that the severest phase of the recession is over..."
- Harvard Economic Society (HES) Jan 18, 1930

12. "There is nothing in the situation to be disturbed about."
- Secretary of the Treasury Andrew Mellon, Feb 1930

13. "The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity."
- Julius Barnes, head of Hoover's National Business Survey Conference, Mar 16, 1930

"... the outlook continues favorable..."
- HES Mar 29, 1930

14. "... the outlook is favorable..."
- HES Apr 19, 1930

15. "While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us."
- Herbert Hoover, President of the United States, May 1, 1930

"...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..."
- HES May 17, 1930

"Gentleman, you have come sixty days too late. The depression is over."
- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

16. "... irregular and conflicting movements of business should soon give way to a sustained recovery..."
- HES June 28, 1930

17. "... the present depression has about spent its force..."
- HES, Aug 30, 1930

18. "We are now near the end of the declining phase of the depression."
- HES Nov 15, 1930

19. "Stabilization at levels is clearly possible."
- HES Oct 31, 1931

20. "All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S."
- President F.D. Roosevelt, 1933

[unblock]

32. one up day after 8 BIG down days is nothing to write home about.

especially when some of those 8 down days opened up big as well.

personally, i think the market could still drop by another 30% or more.

[Leopolds Ghost]

36. What will the market make of such a huge swing?

Wiping out two days' worth of losses?

[tavalon]

33. Dare we say we have a volatile market right now?

The race to the bottom isn't a straight line.

[TexasObserver]

37. Yesterday before business opened, I recommended 4 big bank stocks.

Through trading yesterday and today, those four bank stocks have risen an average of almost 17%, which is twice as strong as the DOW, generally, performed.

Bank of America
Citibank
Wells Fargo
JPMorgan-Chase

JPMC has been flat. I suspect the reason is that JPMC was in the best condition, so they didn't really need the $25 billion capital infusion from Uncle Sam, and by taking it, they have placed their stockholders' behind Uncle Sam's preferred stock position. I suspect that's why there are sellers of JPMC, and they're moving into other bank stocks, but I can't know that yet.

My conclusion that the big four banks will outperform the market because they've been selected by the government to lead the way on the liquidity and recovery plan seems to be a good one.

I'm not suggesting anyone buy such stocks, but I am passing along my thoughts to encourage those with 401Ks to think about which stocks they keep in their port folio. There will be companies that fail in the next year, and it is important not to be invested in a company that can fail. I believe the government cannot let any of those four listed banks fail, now that the government is taking a stake in them.

I've been wrong before, and I could be wrong this time.