Dow closes down another 216. WTF?

[Not Me]

You'd think that with all that has happened this week (Scotty Brown, Pelosi's statement on HCR and the SCOTUS ruling) that the markets would be giddy.

[TxRider]

1. The banks are scared.

Obama is cracking down, and has done his homework it seems.

Getting the U.K. government to agree to the same reforms in London before announcing.

This was arranged, and I assume in the works for some time now.


Tories back Obama banking crackdown

http://www.independent.co.uk/news/uk/politics/tories-back-obama-banking-crackdown-1875767.html

[JBoy]

2. Two main reasons for the drop(s) this week that I know of:

China tightening credit
Obama talking about bank regulation.

[lance_the_man]

18. I agree

I agree with your statement about the markets reacting to changing bank regulations. Financial stocks took a big hit.

[HCE SuiGeneris]

41. Give me a

"W"

Round 2 coming up.

[NJmaverick]

3. From Bloomberg (which usually has a pretty good handle on these things

Jan. 22 (Bloomberg) -- Equities and commodities declined for a third day on concern President Barack Obama’s plan to rein in banks and a possible interest-rate increase in China will stifle the economic recovery. Oil and gold retreated more than 1 percent and Treasuries headed for a third weekly gain.

The Standard & Poor’s 500 Index lost 1.1 percent at 2:15 p.m. in New York, extending its slide over the past three days to 4 percent and wiping out its gain for 2010. In Europe, the Dow Jones Stoxx 600 Banks Index sank 1.9 percent to an almost six-month low. The MSCI Emerging Markets Index declined 1.8 percent, heading for the biggest weekly loss since October. The yield on the 10-year Treasury note added less than 0.01 percentage point to 3.6 percent, trimming its weekly drop.

Obama’s plan to stem proprietary trading and hedge-fund investments at banks spurred concern that a recovery in S&P 500 earnings from a record nine-quarter slump will be threatened. China will raise interest rates by the end of June and increase banks’ reserve requirements, according to the median forecasts of 17 economists surveyed by Bloomberg.

“This may be the beginning of a bit of a correction,” said Michael Strauss, who helps oversee $26 billion at Commonfund in Wilton, Connecticut. “There are still questions on yesterday’s announcement from Washington. Is this something that’s going to limit balance sheet expansion of banks to make loans? Also, China is taking some steps to slow down a robust economy. On the corporate side, we don’t have enough details to say that top-line numbers are significantly better.”

MORE

http://www.bloomberg.com/apps/news?pid=20601103&sid=aHlnrw6kydK0

[nadinbrzezinski]

4. Breaking banks tends to lower stocks

This is what they are afraid off... all that re-regulation.. and that, and not just in the US by the way.

[T Wolf]

5. And has any Dem gone on the air to spin it as a reaction to the events of this week?

Didn't think so.

[no_hypocrisy]

6. Cashing in the chips before the casino is closed for repairs.

[OHdem10]

7. Threatening Loss of Bernanke when things are still unsettled.

Changing the Fed midstream unsettling also.

[Orrex]

8. The Dow's reaction is all the proof I need that this is a good idea

And why the hell does the media equate "the Dow" with "the economy?"

[leftynyc]

9. They hate being regulated

They were hoping Pres Obama would simply keep the same rules in place and let them bring us to the brink of an economic meltown again - so we could bail them out again - so they could thank the taxpayers by still not lending and giving their exec huge bonuses. Fuck the banks.

[MadBadger]

31. +1

[leveymg]

10. They're mourning the Senate HCR Bill - insurance bailout - won't pass as written.

It would have been a spectacular bonanza for the insurance industry. Not to be, poor babes.

Also, the Democratic base has woken up after Tues, even if there's yet no sign of consciousness at the White House.

[Political Heretic]

24. As much as you would think I'd like that narrative - its false, and I don't like falsehood.

I think you know that I have been a ferocious critic of the HCR bill and wanted it killed.

But your claim that this is what dropped stocks yesterday is just not supportable.

You have to understand that Insurance was going to win either way. They win if nothing passes, and they had successfully managed to defeat substantial reform so that if the bill passes they still win. But trust me, if you asked Big insurnace to pick one, they'd pick no reform over reform.

On the surface, without any real policy understanding of the bill, people see "mandated customers" and think that somehow Insurance would prefer this over nothing. Indeed, insurance managed to manipulate the bill to the point where it was something they could most definitely live with, but it still contains enough annoying restrictions and red-tape to be irritating. No reform would be the ideal choice because the status quo is working perfectly for them.

The reason ordinary working families needed to oppose passing this bill, even though insurance companies are also thrilled that it will not pass, is because what was being suggested would likely do actual harm to those families in the long run. Better to kill this mess and save the issue.

Stocks are down today in a direct connections to Obama's announcement about splitting banks / re-enacting glass-stiegall. That is like giving Wall Street bankers a collective heart attack.

Stocks rose on news of bill set backs and stocks also rose on news of bill progress (when it was progress that removed key consumer benefits and added key insurance loopholes.) They win either way on that and was not the cause of yesterdays stock dump.

[leveymg]

35. You don't understand - there's a 3rd alternative, a better HCR Bill by Recon. The Senate Bill is

dead because it isn't reform - it was a way to privatize Medicare and have the Middle Class pay the tab while Wall Street created another big, fat bond bubble. Don't mourn for the bastard Senate Bill - kill it, and pass the pieces that they tried to leave out. It can be done, if the cynics don't prevail on Congress to do nothing.

If the Senate Bill passes we're fucked. If we do nothing, we're fucked. Fortunately, there's a third and only way for the Democratic Party to survive this. Pass a good Bill. There really is no other choice.

[Political Heretic]

37. I don't believe Democrats are movitvate to pass a good bill, I'm sad to say.

Reconciliation would be ok with me if it was used to pass truly good legislation - medicare part E, E for everyone. Expanding the system to all but having non-seniors pay a responsible (sliding-scale, with full subsidies for people in the game between medicare and madicaid) premium along with a 15% co-pay for services up to an annual cap that also slides with income, small revenue generating tax increases on incomes of 250,000 plus so that between projected revenue from fees and from taxes the entire program would pay for itself.

All of this could be passed through budget reconciliation because its all budget and government spending-department related, although it would not last for ever and would expire in a certain number of years (and need to be made permanent.

This could be done, if Democrats had the political will to do so. But they don't. I'm fearful of what they'll ram through using reconciliation - fearful that it will still not be best for working families.

[Mind_your_head]

11. They're snapping up bargains......the market will go up again (soon) and then they'll

take a lot of "profit".

Ah, the stock market is just another word for a 'casino'....a very rigged one

[mwb970]

12. A dip like this is actually a good time to buy in...

...assuming you believe that the markets will continue to rise in the long run.

[Mind_your_head]

14. I realize that. thank you. eom

[mwb970]

34. Sorry to insult your intelligence.

I thought someone else besides you might read my post. Forgot how important you are. My bad. Oh, and "eom" too.

[Mind_your_head]

42. Peace.

You didn't insult my intelligence (I'm not that smart, actually). I (as well as others) are TRULY thankful for your input.

"It's all good"

:hi:

[DrDan]

13. we were in for a correction . . .

this may be it

[timeforpeace]

15. They hate Brown and the demise of HCR and don't give a rip about the SCOTUS decision.

[Speck Tater]

16. The height of the DOW has been based on nothing but hot air for over a year now. nt

[old mark]

17. They are trying to get back at Obama for his "attacks" on them. nt

[Initech]

19. Remember the goal of this exercise: whatever Jim Cramer says do the opposite.

[CJCRANE]

20. It's a good opportunity for bargain hunters. nt

[brokensymmetry]

21. I suggest a slightly different question.

Ask - why is the market so high?

The economy is not good. If you think it is, go forth
and seek a job. People are losing their houses, businesses
are barely hanging on (or not), the dollar is down and the
deficit is up. Consumers are scrambling to pay off their debts.
Consumer credit is contracting. Consider that carefully.
If 70% of the economy is consumer purchases, if employment
is not improving, if house prices are down, and if access to
credit is in decline, where is the increased economic activity
to come from? (Hint: Nowhere. It does not and cannot exist)

The Bush Bailout dumped lots of money into the economy, which
in turn went into the market. The ordinary folks are now
busy buying. Consider carefully who is selling.

My take - we are not in a new bull market. Rather, we
are at the end of a rally during a major bear market. If
that's true, we will come down, and come down hard. We will,
in all likelihood, go lower than we were last March.

And - if the preceding is true - prepare for the greater
depression. If we're lucky, it will end in a decade. It may last
longer.

[RagAss]

22. Buy ! Buy ! Buy !

[Political Heretic]

23. Their down on annoucement from White House that they are going to be the new whipping boy

Which is a good thing.

[Subdivisions]

30. That was yesterday's -200+ drop excuse. n/t

[Political Heretic]

32. Hardly an excuse.

[The Gunslinger]

25. I wonder if Fox news is still telling their sheep that

voting for Brown is good for their portfolios.

[TheKentuckian]

26. Banker/big biz temper tantrum at the very idea of regulation

to intimidate and turn opinion further.

[paulsby]

27. i've been short

and this was long overdue (i posted this yesterday etc.)

market is awfully overbought. or at least was. i'd like to see about 1k down at least in the dow

[sendero]

28. There was no reason..

.. for the markets to be up to begin with. They can't stay there, there is no economic basis for it.

[Subdivisions]

29. Wow. Had to step out and missed the last hour or so. Looks like it

took a header into the rocks. That's, what, down like -550 in the past three days? Looks like we might be in the midst of the next predicted market dive.

[HughMoran]

33. Just forced a needed correction anyway

We know the claimed reasons (China, banks), but it was due anyway. Better to keep the run-up under control anyway.

[SOS]

36. Gotta shake out the suckers every few months.

On CNBC this is known as a "round of profit taking".

[WestSeattle2]

38. The stock market is, and has been, over valued for months....

this is just the inevitable correction. The economy is a train wreck, and all the blather coming from financial network shows will not change that reality.

[TheWebHead]

39. you missed Obama's war with the banks

and China putting the brakes on and possibly raising rates this weekend. Brown probably was good for a 1% gain as markets prefer gridlock, Obama's misconceived banker attack a 3% loss, and China's moves 2% down.

[realitythink]

40. China!!

They instructed their central banks to stop lending. They're afraid that they're housing sector is inflating like US did.

[alittlelark]

43. The 401K casinos are behaving as expected,

move on.