Industrials: Biggest 2 day rally since 1929
Classic Bear Market rally:
click for ginormous chart
Chart courtesy of FusionIQ, Bloomberg
C>>
Best 2 day the Dow has seen since 1929 -- and how'd that work out for ya?
A 29% rally, followed by an 86% sell off . . .
Friday, September 19, 2008 | 02:03 PM | Permalink
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Hah! I just closed on $7.2 million of distressed mortgages at 57% of the debt for an outlay of $4.1 million. The government will pay me $3.1 million to get whole!
That means that every man, woman and child in Amerika owes me a penny. And when I lever it up 30 times… you all will each owe me 30 cents!
Hey, this capitalist matrix sh-t is fun!
Posted by: TG Randini | Sep 19, 2008 2:06:43 PM
HA! Oh god, sometimes this site is just laugh out loud funny.
I'm going to have to find every 300, 400 and 500 point move in the dow and find out when these thing happen. I recall somebody at "Big Picture" saying they only happen during bear markets.
~~~
BR: I am referring to percentage moves (see the annotation on the charts above).
I'll make that clearer in the text
Posted by: Michael Donnelly | Sep 19, 2008 2:08:40 PM
Paulson, Paulson he's our man. If he can't do it, no one can!
Posted by: Winston Munn | Sep 19, 2008 2:09:31 PM
When the markets inevitably start going into freefall again, everyone will say "That short covering rally should be coming soon. Oh wait, no short-sellers??? Damn, maybe shouldn't have banned that..."
HCF
Posted by: HCF | Sep 19, 2008 2:11:46 PM
I'm going to have to find every 300, 400 and 500 point move in the dow and find out when these thing happen. I recall somebody at "Big Picture" saying they only happen during bear markets.
Posted by: Michael Donnelly | Sep 19, 2008 2:08:40 PM
Actually, that is not what was said. It is a statement that this is the "biggest 2 day rally since 1929" and it is either true or not.
It is a statement that "bear markets have rallies" and it is either true or not.
Nothing was said about market moves outside of bear markets.
Posted by: Red Pill | Sep 19, 2008 2:17:26 PM
HCF: I'm telling you they will ban selling soon.
Posted by: Michael Donnelly | Sep 19, 2008 2:17:41 PM
Red Pill: It might have been a Merrill Lynch research note I get, but I thought I heard that all 300+ point rallys have ONLY occured during bear markets.
IE. they are not recovery signals
Posted by: Michael Donnelly | Sep 19, 2008 2:19:47 PM
"HCF: I'm telling you they will ban selling soon."
First, you have to have the ban of criticism of the government, followed by the barring of all negative thought.
Posted by: Winston Munn | Sep 19, 2008 2:21:57 PM
That financial terrorism post was pretty funny, I guess a lot of people didn't get the joke.
In Barry's Tuesday interview, he was calling for a 10% bear market rally. It's possible that given the extraordinary conditions, and looking at the selling of Treasuries today, that this thing may have legs, perhaps to 1300 and beyond, but I will definitely be selling into it.
The market manipulation is what makes people walk away from the markets completely... and then there will be no bid.
A look at the bond markets shows that TIPS are holding steady in the face of a wild sell-off in vanilla Treasuries. Gold seems to be steady with a bottom at $850. That's telling you something right there - that our ride on the D train™ is over for a while. Reflation is here. Tip of the hat to Karen and others. Santelli has been right on the mark BTW, smartest guy on TV.
The Ryder Cup was outstanding this morning. Hank probably timed all this so that we could all sit back and watch the golf.
Posted by: leftback | Sep 19, 2008 2:24:49 PM
1. Thanks guys for letting me get out of my longs today!
2. And thanks market for being up so much. Last time I bought index puts was August 1987... I was a kid and could only put in $4000. 60 days later it returned $240K. Now I get to do index puts again... very soon! Thanks market!
I love this capitalist matrix sh-t!
Posted by: TG Randini | Sep 19, 2008 2:25:53 PM
I just bet the Dow would end down today with massive profit taking, in the office pool.
I may lose but I think the UP is not based on anything real.
Posted by: lilybart | Sep 19, 2008 2:30:57 PM
I hereby nominate @ ken -12:13:31 PM
for The Big Picture Dennis Kneale Memorial Tool of the Day Award.
"Barry, investors are perfectly capable of deciding if a stock is overpriced or not. Short sellers are not critical to price discovery."
but they are useful for truth discovery.
"You need to take a deep breathe and perhaps even take a vacation to clear your head."
after you, Ken.
"The government action is in the best interest of everyone."
except the people of the United States.
" You may have been on the wrong side of that sentiment with a lot of short positions but that was your choice, the risk you took. You need to accept that risk is part of the deal when you speculate by going short."
um.. I think Barry was long, Ken (so was I)
"It's not the end of the world. Cover your shorts. Take the rest of the day off an come back on Monday with a clear head."
yes, you do that, Ken, when you have had time to think about the theft that has just occurred from the taxpayers. In the words of the infamous Luskin, if you were a stock, I'd short you. Oh, can't do that, OK - I am buying out of the money Ken puts.
Posted by: leftback | Sep 19, 2008 2:40:49 PM
dead cat bounce???...
can't wait for next week to begin...
Posted by: Mattie | Sep 19, 2008 2:41:05 PM
Since this calamity was caused by wall street chumps, they should pay for it and any additional money should be footed by the tax payers.
That is the same thievery that made millions of dollars over 10 yrs for the likes of blackfiens/macks/fulds/jim paulsons of the world should be SEIZED by the govt. This itself could amount to few 100 bils. This would them put on the balance sheet as an asset for the new RTC-II.
And all investment banks should be disbanded, henceforth.
Posted by: sammy | Sep 19, 2008 2:42:40 PM
Scary, but pertinent thought about markets:
The average IQ is 100. For every 110 person, there’s a dumb 90. For every 120 person, there’s an even dumber 80. For every 140 person, there is a complete MORON. (Morons have IQ’s of 60… look it up.)
There are an awful lot of dumb people… even dumber people… yes, even complete morons on the other side of your trades.
Markets are not about a 120 – 170 IQ reality. Markets are not about what SHOULD happen right now. Markets are all about what the herd of dumb, stupid, morons are doing.
I always do better trading when I’m completely f—ked up on something or drunk on my ass. Then I get to think like a dumb, stupid moron but with a quicker brain.
Posted by: TG Randini | Sep 19, 2008 2:43:46 PM
Are these up days related to the banning on no NAKED short sell?
Posted by: IAmNotThatGreat | Sep 19, 2008 2:45:46 PM
@TG Randini said:
"There are an awful lot of dumb people… even dumber people… yes, even complete morons on the other side of your trades."
Are you talking about us hedge fund guys again?
Posted by: Testarossa Lamborghini | Sep 19, 2008 2:51:47 PM
Testy,
You got it, hoss! But I love those super-quick computers you guys got. GOT TO GET ME ONE OF THOSE!
Posted by: TG Randini | Sep 19, 2008 2:59:08 PM
Yeesh, what a week. How does this *not* end in disaster?
That is not a rhetorical question. Even as an exercise, I'd love to hear a considered, long-term case on behalf of the feds. Being sympathetic to the mood of this blog and this comments section, somehow I'm not sure I'll get it here. ;-)
I'm falling into the "They'll be eating the pigeons in Central Park" camp of late (i.e., either a '90s-Japan-style frozen economy or a '30s-style worldwide un-economy), so just for giggles I'm game to hear something that a) doesn't confirm my bias and b) doesn't sound like simple shaking relief at having the oncoming train miss by inches.
Anyone want to take a nonsarcastic stab at that one?
Posted by: Rosabarba | Sep 19, 2008 3:01:31 PM
i got on the phone to the staff of my congressional representative and 2 senators.
i said that if this rescue package has the taxpayer just taking the toxic waste securities, and leaving the cream for the investment banks, then i would be voting 3rd party in the coming election.
when one staffer asked me what to do, i said take it all...
if an IB or any other institution is insolvent or so illiquid that it can not function then nationalize the entire institution
Posted by: mock turtle | Sep 19, 2008 3:01:43 PM
Do they come in BLACK?
Posted by: TG Randini | Sep 19, 2008 3:01:47 PM
This is surreal, like some kind of alternate universe where everything is the opposite to what you think it is. I just saw Charlie Gasparino tell the world that Hank 'containment' Paulson is basically the saviour of the world. Someone wake me up, I must be dreaming.
Posted by: Dhukka | Sep 19, 2008 3:06:04 PM
We, the frog, have finally been boiled through and through. I weep for the America our children will inherit.
Posted by: John | Sep 19, 2008 3:06:09 PM
Rosabarba,
You ARE NOT ALLOWED to part the fabric of the capitalist matrix. Watch what you say. The Bush people are monitoring this site for potential financial terrorists!
Posted by: TG Randini | Sep 19, 2008 3:06:29 PM
Michael Donnelly writes:
"HA! Oh god, sometimes this site is just laugh out loud funny."
Mr. Donnelly makes a very interesting point at his blog today that is not in the least bit funny:
"Let's put how much money is being spent in perspective. The amounts of money already out plus being talked about and implicitly promised could pay for free health care for the entire nation for a decade or more.
Imagine that, every single business freed from crushing weight of paying for medical care in the one hand or bailouts for Wall Street in the other hand. The mind reels."
http://tinyurl.com/54nglc
Posted by: Joshua | Sep 19, 2008 3:09:28 PM
