Thursday, July 17, 2008

Turning the corner or a false dawn?

Banking rally boosts US markets

"US stock markets have rebounded strongly after better-than-expected results from a leading bank and further sharp falls in the price of oil. The Dow Jones index closed up 2.5% after its strongest daily performance in three months, driven by demand for leading bank stocks. Citigroup, Bank of America and JP Morgan all rose sharply after Wells Fargo boosted its shareholder dividend. Oil, meanwhile, fell more than $4 to close below $135 a barrel." Thought i'd post this to stimulate some discussion. Are things really as bad as we thought, or is this a rally before the crash?

Posted by shipbuilder @ 09:46 AM (1602 views)
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10 thoughts on “Turning the corner or a false dawn?

  • nothing will change the fact people cannot afford 10 x or more their wages for a house

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  • sold 2 rent 1 says:

    “a rally before the crash?”

    Oh yes. See posting lower down
    “Safe Haven: CNBC Europe – Bill McLaren”

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  • gardeniadotnet says:

    From the article…
    “There’s a great deal of interest in financials turning the corner.”

    I’ll bet there is!

    A pity then, that financials are on a one-way street to oblivion.

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  • paranoia blue says:

    Dead “fat cat” bounce

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  • Bottom fishing. People hoping to catch them cheap. Unfortunately they will probably get cheaper after this dead cat bounce. Haha.

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  • rotten tomato says:

    This interesting aspect of western banks trying to save themselves by offloading their bad debts onto the general populace by means of corrupt politicians is noteworthy in the fact that it will eventually not save the banks. What it may well do however, is herald in new dictatorships on the old continent, as desperate people look to unorthodox solutions. But it was the same in Germany’s hyperinflationary situation of 1923. Funny how financiers are always so unimaginative when it comes to resolving their problems. It’s always the same tricks they use. Get governments bankrupt and impose new draconian austerity measures on the populations.
    Italy’s finance minister Giulio Tremonti has seen exactly this problem coming, he has written numerous books on the subject, as well as the failure of globalization. He was the first to warn of unchecked speculation as the “Plague of the 21st Century”, during the G8 summit in Japan, where he openly wanrned of dangers of new fascisms. And he is fighting to have EU antitrust laws applied to restrict speculation on oil and agricultutal futures, at the very least he says that any forward positions must be covered by 50% cash up front. Naturally the main European media do not report this. Another of his main themes is that fictitious economic activity and growth (speculation and derivatives) have replaced real economic activities such as producing things, and emphasis must once again be placed on the latter. I like this guy, and I hope he wins his fight, for all of us.

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  • Eek. I’ve just stashed some of my house money in gold. Explains why oil is down and markets up, if I hadn’t bought gold, oil would be up, markets down and gold would be rocketing. Just where was that luck queue before I was born anyway?

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  • I agree with paranoia blue on this one.

    Basically it is people who have shorted the shares in the past few days closing out their positions.

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  • Yep, it’s all about what’s priced in, and expectations are pretty low.

    Let the market have a bounce, punish the lazy shorts, and we’ll be back to normal bear service sometime next week I think.

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  • Short and Sweet.

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