Do You Think the Turnaround Has Begun?

The Dow is up 500 points, or 6 percent, and the S&P 500 and Nasdaq are both also up more than 6 percent in lunchtime trading.

There's a feeling among some that the markets are starting to feel more confident that the global governments -- because that's who it's up to now -- are beginning to take real steps to stanch the bleeding and put their economies back on the road to recovery.

But what do you think?

Do you think the crisis has hit its worst point, or no?

If not, what will it take? Is the Paulson Plan enough? Or should the government expand its nationalization plan?

How about make-work federal government jobs programs like FDR implemented?

The economy traditionally lags the markets; what are you seeing?

Let us know. As always, we'll post all of your comments at the bottom of this entry and then, later today, we'll compile the best responses for another posting.

-- Frank Ahrens

October 13, 2008; 12:20 PM ET  | Category:  business
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Comments

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I always thought that 8,000 would be the low point in the stock market, but that will not be the main issue. The issue is still Main Street jobs = buying power. With the great increase in job layoffs the holiday season will be bad and the retailers will lose big. We are in for a long haul yet.

Until we see job growth, hopefully with green energy concepts, reduction of money borrowed, finding our limits as consumers, the only thing the stock market gains will be is owns 401(k) or investments.

For the average person, it will be a bear outside your door for a long time.

Posted by: jerry rubin | October 13, 2008 12:41 PM

Short term turn around. The next three months will still be full of ups and downs. Earnings will probably get cut all over and that will put a brake on a fast upswing. Election. Israel/Iran after election. December/Jan will be very interesting.

Posted by: Anonymous | October 13, 2008 12:42 PM

First question.
But what do you think?
Great question. I'll think about the others and get back at you. Anything is possible. If thing keep going up the way they should and oil keeps going down, it looks good. I need lunch, so we'll see how that goes down.

Posted by: Night Mayor | October 13, 2008 12:43 PM

Wall Street goes shopping with our credit cards and blank checks.

Posted by: ratl | October 13, 2008 12:43 PM

No "make work" is required. There is plenty of federal "real work" desperately needed.

One miniscule example - there are thousands - are the highways in Pennsyvania. It seems every other PA highway is under endless slow moving construction with only one lane open in each direction. That's an "investement" not only because those fixing the highways pump their salaries back into the economy but goods and services on unclogged roads will boost productivity, efficiency, etc.

There are thousands of other "real work" infrastructure projects that could stimulate the national economy: building windmills, solar panel fields, gasoline refineries, bridge repair, and on and on.

Posted by: Plenty to do | October 13, 2008 12:44 PM

suckers rally built on credit again - this time from the Treasury

Posted by: mongolovesheriff | October 13, 2008 12:50 PM

This is the problem which has evolved in this great country of ours; Whether it is the economy, our personal relationships, or any other problem we face as American's we always want instant gratification. Until we can come to understand that solutions aren't to be found in wipping out your credit card, wipping a**, or listening to quick sound bites or cure all web sites, we will continue to find ourselves in messes like we are now experiencing. In addition, we must recognize that there is always good reason for oversite, whether it be in business or raising children. The whole notion of what constitutes "freedom" and "heroism" has become so distorted in this country that we have "all" lost our way. Each of us, individuals, spouses, businesses, and government has "real" responsibilities and it is time we stop the nonsense and get back to looking out for and up to eachother. The only ones amongst us who bare no responsibility for the state we find ourselves in as a country are our children, yet they are the ones who will ultimately suffer the most due to our failings. It is time for us to stop thinking as though every problem is solved by fighting and return to the relying on the types of character that as individuals we know are needed in a time of crisis, intelligence, calm and resolve.

Posted by: cathy | October 13, 2008 12:52 PM

Do you think the crisis has hit its worst point, or no?

No. The bright side is that a crisis is a good opportunity to make art. The worse it gets, the better the art will get. Hire more writers because as it keeps getting worse, there should be more of need for writers. I think there is also a need for new business books. Maybe you can start Post Books and expand. A crisis doesn't mean everybody gets to do nothing. It means you have to do more and there is the opportunity. This all needs to be passed to the next generation. It requires heroic daring and imponderables of high civilization. What's the option? A return to the stone age? It will be better in a couple of years. Until then all we can do is keep creating, so it's always the same thing. Creative capitalism. You sure catch a lot of hell for it.

Posted by: Night Mayor | October 13, 2008 1:24 PM

In response to the question:


God, I hope not!

I love the half off sale right now.

Posted by: Vader, Darth | October 13, 2008 1:25 PM

We have a long way to go to heal completly but it is encouraging to see the bleeding stop.

Posted by: Jordan | October 13, 2008 1:29 PM

US Treasury Secretary Henry Paulson
Has Already Received His PERSONAL BAIL-OUT

Under Treasury Secretary Henry Paulson’s .. Former leadership at
Goldman Sachs, the company has been instrumental to its penetration of Western
capital and other markets. - - Henry Paulson was vastly effective in Communist
China’s .. Interests and enabling their access to Western economic assistance
and high technology

In late January 2006, Goldman Sachs purchased a stake in the Industrial and
Commercial Bank of China (ICBC), China’s biggest bank, for $2.58 billion
Treasury Secretary Henry Paulson''''s .. Personal stake .. In this transaction
was $25 million

A PERSONAL BAIL OUT for : Treasury Secretary Henry Paulson and His
Criminal Friends

(Mar 27, 2008 (ruters.com) BBC) ... White House Resists Pleas for .. Mortgage Bailout
WASHINGTON (Reuters) - As clamor rises for federal help for homeowners
who face losing their homes .. U.S. Treasury Secretary Henry Paulson .. Seems
to be digging in heels against the effort.

U.S. Treasury Secretary Paulson sounded a tougher note than ever against any
possibility of bailout for individual mortgage holders, singling out the growing number
going "under water" as their loans exceed the diminishing value of their properties.

THEY ARE BUYING THESE MORTGAGES FOR 6.75 CENTS ON THE DOLLAR. PEOPLE, NOW DO YOU SEE WHAT THEY DOING.

SO YOUR HOUSE YOU JUST BAUGHT FOR 300,000 AND THEY AND YOU THINK IT WAS A STEAL. HAHAHAHHAHAHAHAHAHAHAHAHAHAAH

TO STOP ALL THE BLEEDING THEY NEED TO DO THE FOLLOWING.

STOP ALL FORCLOSEING NOW ASAP.
THEN ANYONE THAT BAUGHT A HOME OR REFI A HOME FROM 2001 UNTIL 2008. THEY NEED TO JUST REFI THEM AT JUST ABOVE THE PRIME RATE, AND MINUS OFF 80 PERCENT OF THE PRINCELBLE AND START OVER .

THIS WOULD GIVE THE BOTTOM..AND OF ALL FORCLOSEING.

THEY WOULD ONLY DO THE HOMES THAT WAS USED FOR HOMES . NOT SOMEONE JUST LOOKING TO FIP.

THIS WOULD END IT. I HAVE BEEN SAYING IT FOR 5 YEARS NOW. IF THEY MANDATED IT 5 YEARS AGO WE WOULDN'T BE IN THIS MESS NOW..

Posted by: DAVID | October 13, 2008 1:29 PM

i hope it keeps going up. we need jobs

Posted by: jp | October 13, 2008 1:30 PM

The market movements are just a snapback form a higly oversold condition. They have no significance beyond reflecting the reality that the global financial system is unlikely to collapse this week.
The government actions do have some significance. It is maybe even likely that the worst has past in the chance of a complete collapse of the global banking system. Of course, we have already had more than one time in the past year when it was widely thought that the most acute crisis was past and the problems later turned out to be greater than anticipated.
But as far as the overall economic contraction goes, we are still a long way from having an idea when it might turn around. Housing is still likely to be in a downtrend for an extended period in the US. We are just beginning to see credit card debt impact the consumption patterns of individuals. We are in the early stages of a recession in the real economy. Outside the US, economies are in earlier stages of the contraction. All of those factors are before we even start to think about the seond stage affects from factors like the loss of jobs and income in the financial services industry, the loss of tax revenues because of lower financial profits, the reduced availability of credit because of more reasonable lending standards, and the impact of reduced equity values on the spending patterns of retirees and non profit institutions that depend on equity income to support their existence.

Posted by: dnjake | October 13, 2008 1:36 PM

Let's come up with a public works package -- aimed at tearing down foreclosed houses and reclaiming urban blight -- with green housing (made from recylable materials) in small, garden-based communities capable of supporting themselves; mass production of solar panels and installation on all homes; grants for start-up car-building entrepreneurs who've already got better plans on the table than Detroit does. Let's stop crying "the sky is falling" and aim for the stratosphere!

DMetcalfe,
Vista, CA

Posted by: Opportunity knocks | October 13, 2008 1:39 PM

Is the Paulson Plan enough? Or should the government expand its nationalization plan?

Too much. We're in the rustbelt here. We have empty plants and factories all over the place. We went through winter when the old people were freezing to death in their own homes around here. Wall Street was working big deals and it was like the cold days of hell around here, as they shipped away our jobs and means to support ourselves. Now they're down in Washington talking about a nationalization plan. Now we are getting a slots casino and we have a big airport which is basically bankrupt. Nationalize the airports and keep the junk bonds. They were floated and are now sinking. That's a local problem. All the cash is going to save AIG. The taxpayers are thrown to the wolves and they are all smiles for the cameras.

Posted by: Night Mayor | October 13, 2008 1:42 PM

I hope so, but doubt it. I am mindful that the market turned around in 1930 following the 1929 crash, only to lose its gains in a long, steady slide between 1930 and 1933. We are likely seeing the same thing now. Currently there are some good buys, but not enough of them to sustain a bull market, and the recession is now inevitable and will have a strong long term impact. If we are both lucky and wise, we may be able to limit our losses,
and perhaps avoid a depression.

Posted by: Arikarra | October 13, 2008 1:47 PM

If credit doesn't start flowing, small business that depend on revolving lines of credit will lay off far more employees than the already large number who have lost jobs so far. Then today's "rally" in the market will be wiped out and plunge way further. Note that Japan is **still** reeling from its 1990 crash. Don't expect things to get better here any time soon.

Posted by: Seismic-2 | October 13, 2008 1:50 PM

Why not ask an economist? How would the general public know based on one good morning of trading? Journalism has been reduced to telling people what to think one minute and then polling them the next.

Posted by: Sara B. | October 13, 2008 1:52 PM

Yep, there is turn around for the wealthy and corporations. It is the rest of us who will continue to pay the price for their greed with this horrible economy.

Posted by: Simon | October 13, 2008 1:54 PM

How about make-work federal government jobs programs like FDR implemented?

Our state has $10 billion in needed bridge repair work and bridges are being closed because the beams are cracking and the structures are shifting. One bridge collapsed down on the Interstate below. Hire more bridge inspectors and then good luck finding the money to repair the bridges. They need money to fix up Wall Street. They are nothing more than gangsters robbing the next generation. I have no trust in them. I went the life, liberty route. I'm going the hate, death route now. The whole country is going to hell. It will get better with time. Don't turn toxic Post. If that's possible.

Posted by: Night Mayor | October 13, 2008 1:56 PM

Bottom line: getting into (even more) debt does not make you rich.

The fundamental problems with the economy are unchanged and there will be no real recovery until housing prices are allowed to reach their natural bottom and America starts producing something of real value, not just a bunch of fancy securities that our financial industry has peddled like snake oil.

Posted by: mary | October 13, 2008 2:02 PM

I think we're far from the bottom. I am a consumer who will only be paying my credit cards off for the next year-and-a-half (and, as long as I keep my job and stick to my plan I'll be able to do that). You see, I've been spending at a faster rate than I earn, and I have a strong suspicion that there's a lot of that going on. Sooner or later we have to pay the piper. The economy simply cannot continue to grow at a pace greater than what people earn and can spend.

What REALLY irks me though is any suggestion of helping homeowners that can't pay their mortagages. Exactly whose fault is that? I KNEW I couldn't afford a home at housing prices that were skyrocketing inproportionately to incomes (well, I could have, but that would be to the detriment of anything else I'd want to do as a consumer). I KNEW not to count on making more money later to pay for a payment I knew would go up after I closed on a "creative" loan with no money down. I KNEW that these ridiculous prices wouldn't be sustained and that the result would be negative equity. SO I DIDN'T BUT A FRICKIN HOUSE!!!! If homeowners that made poor decisions end up being rewarded, I will be livid.

Posted by: Jeff | October 13, 2008 2:08 PM

You can not base the turn around on the one day rallies because there is another ticking time bomb on the $54T debt securities that some standing banks have and that has not been addressed due to MFCA deregulation placed there by Gramm in 2000. In summary the fundamentals of the economy remains unchanged.

Posted by: James | October 13, 2008 2:13 PM

The problekm with the current fix is that it merely artificially stimulates Wall Street and banks. They, in turn, could give a rats behind about ordinary people and will accelerate outsourcing an "free trade", corrupt and immoral business dealings with consumers, which is all going to lead to an even bigger collapse in the near future. When are our "genuis" leaders going to recognize that WE NEED JOBS. The idea of a "service based economy" is simply nuts. Without a manufacturing base, without citizens with technlogical skills, a country simply cannot survive. So, either we implement the same tariff's and punartive taxes on outsourcing jobs, the same limits on H1-B and similar visas, the same prefernce for our own citizens in university placement in enginering and science programs, as Europe, as the entire rest of the world, or WE WILL FAIL!

Posted by: MikeB | October 13, 2008 2:13 PM

Yes, I think it has begun, but I think it will take at least two years. And it will take me five to ten just to recoup my retirement losses.

Posted by: JAB | October 13, 2008 2:16 PM

I get so bitter and angry when I realize that Hillary is the one candidate who could have fixed all of this financial mess.

Hillary was entitled to the presidency and the reality-based-community of angry, bitter leftists will not let Obama Hussein Barack forget that!

Posted by: twin_peaks_nikki | October 13, 2008 2:24 PM

I don't think a single day of results on the NYSE or NASDAQ makes for a turnaround. I think rather we are in the middle of a very long term "turning to," as in the "Europeanization of America." This recent financial crisis has only accelerated that trend. See Writing Frontier's piece on this at

http://writingfrontier.com/2008/07/27/the-europeanization-of-america/

Posted by: Writing Frontier | October 13, 2008 2:41 PM

In a word "No." One flower does not make a spring,

Posted by: forrest1 | October 13, 2008 2:46 PM

NO.

There's been no bottom hit. If there is no bottom hit, there can be no rebound.

Before that happens, there may even have to be a fundamental change in how we cover bank-to-bank and bank-to-business loans. I'm not an economist, I don't know squat.

But I don't feel like there's any sense of turnaround, no. We're still insisting on doing the same things that got us into this mess. Borrowing and spending. Pretending money exists when it doesn't. I dreamed I won the lottery last night, but you don't see me buying an apartment in Paris.

Posted by: Worthy Evans | October 13, 2008 2:51 PM

That's terrible news!!!

I've been saving, and saving, and saving every penny I could, for the past five years. I have almost $100,000 sitting in a savings account, waiting for the day when house prices come down to real-world levels, so I can buy the house of my dreams... all cash, no mortgages.

Last week, I was almost there, as the global economy was on its path to regain some rationality, instead of the artificial bubble we have lived in for the past decade.

Now, I see my dream go away, as Wall Street celebrates a coordinated bailout by the world's Central Banks. We are now again pumping hot air into the balloon. Speculators are dancing all over the floor. Politicians breath with relief. Millions of people who survive on borrowed money are ready to go shopping again.

Only stupid people, like me, who live within our means, who have the stupid habit of saving money and don't gamble with other people's money, are the ones who see our dreams disappear.

Posted by: Scooby | October 13, 2008 2:54 PM

Nobody seems to mention the fact that the bailout in the US is funded with money that does not actually exist. If there were any real assets behind the $700 billion, maybe there would be some benefit. No the uptick in the market is based purely on desperate hope.

Posted by: joebewildered | October 13, 2008 2:59 PM

The economy traditionally lags the markets; what are you seeing?

Dow on Track for Biggest Point Gain Ever
CNBC
I'm drowning here with some rare J&B myself, so I can see. I can't legally drive though. The Post looks to be holding steady. It's a long way back to the top. The only bad news here is that old bottle is almost empty. I'll get more in case of a crash later. Have a good happy hour. I'll have a double, I'm in trouble. I've got no control.

Posted by: Night Mayor | October 13, 2008 3:06 PM

The turnaround is a false turnaround just like the previous "prosperity was false. It would be a true turnaround if it was market driven and not government driven. Also, the economy is heavily dependent on debt...particularly heavy mortgages, two income families and consumer debt. So, no, there is no turnaround..just a little maintaining until more bubbles burst.
The consumer credit industry is next.

Posted by: Wayne | October 13, 2008 3:09 PM

One apparently good day in the US stock market is hardly reason to believe the turn around has come. There are systemic problems to solve. Foreclosures, devalued homes, job loss, etc. Asking this question is premature.

Posted by: Peter | October 13, 2008 3:21 PM

One apparently good day in the US stock market is hardly reason to believe the turn around has come. There are systemic problems to solve. Foreclosures, devalued homes, job loss, etc. Asking this question is premature.

Posted by: Peter | October 13, 2008 3:22 PM

Economies are 'built' from the bottom-up. Money percolates, in commerce, from the people to business....to industry... to banks. This is and has been the traditional way that wealth is accumulated... money flows 'up' the social pyramid from the middle-class majority to the upper financial class minority.

This global bailout is by-passing the 'commerce' part and giving the people's money (government bailout using treasury funds) directly to the banks. This global bailout plan is ridiculous.

If I have a $10.00 note and go to the store and make a purchase... then that $10.00 goes from the grocer to the wholesaler.... from the wholesaler to the farmer..... from the farmer to buy and iPod..... from the electronics store to the employees, etc., etc, etc.
20 or so people have benefited from my initial $10.00 purchase.

The 'bailout' by-passes 'the economy'. And does so with the vague idea/notion that banks will make money available (loans) to the middle-class..... this process is a complete reversal of the 'normal' growth of an economy (from the bottom up). As such, it is 'untested', speculative and, quite frankly, risky.

Additionally, the American public cannot be certain if all of this flurry of 'rescue' activity is a smoke-screen because of the upcoming Presidential elections. ..... "it will take a while to work..... perhaps after the election.... heh heh......"

This could all wind up being the biggest heist in the history of the world. Money taken right out of the pockets of the citizen and placed directly into the global banking system.... by-passing 'commerce'.

Who would go to a store and give the cashier $10.00 and then leave without any merchandise? Well, this is (seems) exactly what this 'bailout' is doing.
It pretends that the banking industry exists on some kind of 'flying-carpet' that operates without the support-structure of the global middle-classes.

Economics without sound economic philosophy.... a 'Hail Mary' play to try to reverse a calamity that (opinion) should be dealt with from the bottom-up rather than direct-depositing the treasury into the coffers of banks.

This plan is a Republican (pro-business) wet-dream and a nightmare for 'Main Street'.

.

Posted by: John Charles Webb | October 13, 2008 3:35 PM

Doubt it, tomorrow the markets will go down 5%. I hope I'm wrong, but we won't see improvement during the remaining of this year

Posted by: Leesburg, VA | October 13, 2008 3:36 PM

This Dow run up is nothing but a "dead cat bounce". The stock market can't keep going straight down. The shorts have to take their profits, and that pushes the market back up for a while. We may well have a few thousand more points to go down before it ends.

You will know it is over when great, well-run companies with sparkling balance sheets and great future prospects are selling below book value or even below the cash per share they hold.

Also, at the bottom expect everyone to be predicting that the market is going much further down. Then, everyone who was going to sell will have sold, and the market will turn around.

Posted by: Stan | October 13, 2008 3:39 PM

The crisis is being turned around, so in that sense it may have hit its worst point. But that doesn’t mean we won’t be bouncing off the bottom for a while.

This is because nothing has been done to get at the underlying causes of the crisis, so it is still with us. Also, the crisis has little to do with our failing economic fundamentals—infrastructure, jobs, savings, debt, which is getting only worse. This will take an FDR type program to turn-around.

The Paulson Plan (what flavor today?) isn’t enough. The European strategy is helping with the banking issues, and if adopted by Paulson gives the taxpayer more than just bad debt, losses.

The gambling products in the market must be dealt with. The fraudulent and improper rating of bonds needs to be addressed—some folks need to go to jail. The secondary mortgage market need to go away, loans must be properly underwritten, not just sold. The subprime market need rehabilitation and cannot come under the influence of the market as it has, so maybe Freddie was a bad idea.

Bottom line is the $700 billion bailout to bad apples for bad debt was a mistake, as was Congress failing to include anything to help keep people in their homes, and remedy the aforementioned problems in the market.

The Stock Market is for investing in America. It’s not supposed to be a gambling house, which it has become with derivatives and other highly dubious products that have nothing to do with capitalizing America.

Posted by: Carl Lee | October 13, 2008 3:39 PM

Everything looks again OK. US is back, financial capitalism is on our shoulders, let's pay for them and we'll feel good again: credit card , comsumption, Reality TV, Bombing other countries, SUV, Cheap Oil, We are the best in human history, God Damn the idiots in the rest of the world, USA,USA,USA,USA,USA,USA,USA,USA,USA,USA,USA,USA,USA,USA,....Let's vote JMC/SP and start bombing Iran to make happy AIPAC and our creative financiers of WS It's so good to feel that you are the best when in fact your are a complete alienated slave of the $$$ masters.
The nightmare continues

Posted by: eddy3 | October 13, 2008 3:41 PM

No.

Posted by: Slim2 | October 13, 2008 3:49 PM

When Bush was elected, the Dow was around 12,000 --30% higher than today-- and the S&P around 1000. That was eight years ago. So the market, at best, has been sliding for 8 years. What the heck is that question you're asking? Did the market hit bottom? It's been in the basement for eight year! What are the chances that's going to change? It doen't take half a brain to answers...

Posted by: Regis | October 13, 2008 3:55 PM

More like dancing sailors on a sinking ship. Here's the problem: About a decade ago there was a very subtle shift from income-based to debt-based economic growth. It worked in the short run, with lots of cheap and easy money to maintain our wealthy lifestyles. But mounting consumer and government debt can only run so long before there is a necessary and unavoidable rebalancing of the economic ledger. That is what is occuring now, with the current 'credit crunch' nothing more than the diminishing of debt in response to its overabundance. Most worrisome is that our policy makers seem to think they can spend their way out of this with, you guessed it, more debt. All that this is doing is masking some of the current debt and putting off what surely will be even a more painful rebalancing of the economy.

Posted by: Erica L | October 13, 2008 3:56 PM

Like some of the posters have mentioned, the Dow cannot go down every single day. We will see up days followed by down days, but down days will outnumber up days until the market becomes right priced. At 8K the market was close to being right priced. At 9K the Dow is overpriced. The market will hit bottom during summer of 2009. The subprime foreclosures should peak by summer of 2009 since most of the subprimes were taken out between 2004 and 2006. Those on 2/28 mortgages have seen their adjustable rates reset which means those most likely to default brought towards the end of 2006. Since it takes 6 months to a year between the time a mortgagee has trouble paying their bill to when foreclosure takes place we won't see the peak until perhaps the middle of 2009.

Posted by: Mr.Bilko | October 13, 2008 3:58 PM

Is this the turnaround?

You have got to be kidding. There will never be a turnaround until people, businesses, communities, and countries realize that if you can't pay for something out of pocket, you can't have it.

Who in their right mind would borrow money and lend that money to an already bankrupt individual? The US Government is spending money and racking up a national debt that far exceeds its ability to ever pay it off. The national debt exceeds the total income of over 75% of the working population.

Just exactly where does Paulson expect to find all this "bailout" cash? I'm sorry, I'm mistaken. That's not cash it's CREDIT.

Think about it.

The definition of insanity is doing the same thing over and over expecting a different result.

Posted by: toms | October 13, 2008 4:03 PM

There are a variety of markets... So the two questions are (1) a turnaround in which? And (2) for how long? If the banking sector is what one is talking about, we may be over the worst, as governments absorb the problems of the banking system... But then there are the ever-growing problems of government and consumer indebtedness (and debt service costs!). If the stock markets discount the impossibility of government and consumers to handle ever mounting debts, this is no turnaround! If the markets follow the 'greater fool' sequence, we're in for one more bubble before the debt simply sinks the ships. Yep, governments can manufacture another boomlet, but I wouldn't bet my retirement on a future built on indebtedness.

Posted by: Tom B | October 13, 2008 4:03 PM

No. Its ridiculous to think the turnaoround has begun. What seems to have happened is the people that have been pulling their money out of the markets for a couple weeks decided that we're near bottom & have started putting money back in. Hopefully this means the panic stage is over, but it does not mean that we've turned the corner and the worst is past.

Posted by: bsimon | October 13, 2008 4:18 PM


European Crisis Deepens; Officials Vow to Save Banks

The credit crunch deepened in Europe as government leaders pledged to bail out troubled banks and protect depositors. Leaders of Europe's four biggest economies stopped short of a plan mirroring the $700 billion rescue in the U.S. and instead agreed to work together to limit the economic fallout, ease accounting rules, and seek tougher financial regulations. French President Nicolas Sarkozy called for a global summit to implement complete reform of the international financial system. We want a new world to come out of this,'' Sarkozy said.

----------

If you had any doubt, the purpose of this financial meltdown has been stated above, "We want a new world to come out of this".

Posted by: Concerned U.S. Citizen | October 13, 2008 4:19 PM

We are nowhere near bottom. Keep your cash on the sidelines, and bolt it down and seal it in concrete if you must. You buy now, you will regret it.

Posted by: madman | October 13, 2008 4:31 PM

I think "the greatest financial crisis since The Great Depression" is over but that we're in for a hard recession and won't see any real gains in the Market (or economy) until sometime late in 2009 at the earliest.

Posted by: Fred | October 13, 2008 4:32 PM

Main St, what are you people thinking, Wall Mart took care of that long ago.
I might be good to start thinking about morality in business and perhaps getting the profit motive out of health care, medicine, war services, and turn our country back to rebuilding itself and it's communities. And let's stop exporting our pollution generating production to other countries. pollution, carcinogen, diseases affect the entire world. We may live in a bubble economy but it will not protect us.

Posted by: Charles | October 13, 2008 4:34 PM

Scooby, there are places where 100K will buy a modest house. Just not in Democratic areas.

Take out a LIAR loan, claim to be a minority, and you will get a bailout under Obama/Pelosi/Franks.

It's a proven fact.

Don't tell anyone about the 100K and claim disability (SSDI). Each month waddle down to the Social Security Office to complain "where's my check."

Soon, the Commander in Chief, crackhead Obama, will have his portrait there.

You can thank him that you'll never have to work hard, play by the rules, or save again.

Illegal alien, minority, lib, gay, Hispanic, dope smoker, draft dodger, campus radical, terrorist bomber, racist preacher (no whites, please), or whatnot, you are set for life.

And the Rich Republicans and Limousine Liberal Democrats will each compete for your vote. They are all the same. They are all working for Wall Street.

Posted by: Henry Potter was from San Francisco | October 13, 2008 4:38 PM

No because We have just created Money out of thin air. Trillions of Dollars that just appeared from the Money tree. There is no free lunch and History tells Us that the inflation that ultimatly results by diluting the value of Our Money will be the Tidal wave of collapse and lead Our Nation down the tubes. If You think $4.00 a gallon milk is high how does $20.00 and climbing sound?

Posted by: MikeL | October 13, 2008 5:05 PM

I think the panic has abated, at least temporarily.

The impact of recent massive losses of wealth on Wall Street, however, has yet to be felt on Main Street (except in the form of psychic pain by folks perusing their retirement accounts).

The jury is still out.

I continue to believe, as I have believed for the past two weeks, that this is an excellent time for people under the age of 55 to *nibble* at equities, by which I mean investing, say, 2 to 5 per cent of your paycheck every time you get one. Just don't expect straight upward movement, this thing could go sideways with lots of up/down noise for 15 years. It is, in any case, a heck of a lot better time to buy, say, shared in a preferred stock mutual fund, or an S&P 500 index fund, than it was 12 months ago.

Posted by: OfficerMancuso | October 13, 2008 5:08 PM

The stock market will continue to ponder below 10,000 points as recession hits and profits on corporation decreases...the financial sector will improve as the bailout plans take in effect. it will be a long journey before we recover.

Posted by: carl | October 13, 2008 5:17 PM

hardly - with Bush still in office.
Perhaps some of his treasury cronies with the inside scoop.

Posted by: Rob | October 13, 2008 5:20 PM

bail out for more $$$ exc bonuses only

how about the average guy and his lost job and house

Posted by: sandy from cleveland | October 13, 2008 5:37 PM

Well, if the economy has begun to turn around, George Bush deserves the credit. Not Mr. Hope Sphincter.

Posted by: GB | October 13, 2008 5:39 PM

Folks the only thing that has happened is they have put an extra gear in the printing press. "NEVER GIVE A SUCKER AN EVEN BREAK"!

Posted by: Harried | October 13, 2008 5:43 PM

With the Feds now printing billions upon billions of dollars we can be sure that our currency will be worth much, much less in the near future. In five years our buying power will be half of what we have today. Unless we can double our productivity in five years deflation will be the only winner. Like whack-a-mole, each time the government has messed with the market they have gotten it wrong. Something "surprises" them! Well, they can't create money without destroying its value especially when it's backed, supported and based on bad debts... bad mortgages, stupid loans, greedy paper hangers!

Posted by: Willie Lowman | October 13, 2008 5:44 PM

WillieLowman wrote, "With the Feds now printing billions upon billions of dollars we can be sure that our currency will be worth much, much less in the near future. In five years our buying power will be half of what we have today. Unless we can double our productivity in five years deflation will be the only winner."

1. The Feds are borrowing $1 for every dollar they're printing. That's not the same as simply "printing money".

2. Your arguments seem contradictory. Normally you'd think that printing money, which you say is happening and I say isn't, would be inflationary. Belief that we're printing money would explain why you think our buying power might be halved in five years (or one, if we're really just printing trillions of dollars).

3. But then you say, "deflation will be the winner". If I understand the word "deflation", it means, "falling prices for goods and services". You can't print money, cause inflation, and cause deflation at the same time.

4. What I see happening is aggressive government intervention to prevent deflation. This intervention may prove to be inflationary. If so, it won't be because government was printing money.

5. I think the Fed and the Treasury correctly discern that given equal risks of deflation and inflation, deflation is more to be feared.

Posted by: OfficerMancuso | October 13, 2008 5:55 PM

They hurt those imbeciles who had shorted stocks today. That might go on for a while.

But it's still a suckers gone. The US of A is broke and there ain't no getting away from that one fact.

We just passed the "official" military budget for about 650 billion. Add the unofficial part in and you get 1.5 trillion dollars. And we do that each and every year, year in and year out. The empire is crumbling and we can't sustain it any longer. Get used to living with less.

Posted by: Buck | October 13, 2008 6:53 PM

Nationalizing the banks is an important first step. Some will suggest that another big tax rebate will be necessary to keep the stock market rally going, but I would disagree. Tax rebates exacerbate the trade deficit. I do think the US government needs to borrow from abroad (e.g. China) to fund another big fiscal stimulus package, but this time it should be focused on alternative energy infrastructure and other investments that can help us reduce the trade deficit. Finally, the government should not try to re-inflate the housing bubble. We can't pay off the trade deficit by making investments in houses. If we need to borrow from abroad to stimulate the economy, we should use the money to make investments that will help us reduce the trade deficit.

Posted by: Fred Beshears | October 13, 2008 7:00 PM

Iam not sure, does this upward trend factor in the sub prime mess. All I have heard from the pundits is that no one really knows the extent of the sub prime mortgage mess. Besides lets not forget, if these investors big and small so smart, then they would have taken necessary steps long before the financial meltdown.

Posted by: poppy2 | October 13, 2008 7:00 PM

There will be volatility in the market until there is consumer demand. There is no consumer when there are no decent jobs. The government intervention is spin to get through the election. Between the election and the spring will be the real test because then there will be acknowledgment that we are in a period of debt deflation. Then the proper economic "rehab" tools will provide the cure.

Posted by: Fred D. | October 13, 2008 7:26 PM

There is no doubt we have turned a corner. This crisis, in the real maening of that word, is over. Now, will someone please tell the media. They reported on this issue like it was a horror movie, the height of media irresponsilbility... no wonder the public are so pessimistic. The Federal government can also now lean on the banks they own to lend money to the residential mortgage sector. After this many months of purchasing inactivity, there is a huge log jam in the housing sector, trapped due to the lack of available and affordable mortgage deals out there. That will soon change. The housing market will stabilize and grow and the Dow will follow suit. This crazy packaging of debt and subsequent insuring of those packages will never return, but that is a good thing, not a bad thing. So cheer up everyone!

Posted by: Rob Bonnar | October 14, 2008 8:31 AM

There is no doubt we have turned a corner. This crisis, in the real meaning of that word, is over. Now, will someone please tell the media. They reported on this issue like it was a horror movie, the height of media irresponsilbility... no wonder the public are so pessimistic. The Federal government can also now lean on the banks they own to lend money to the residential mortgage sector. After this many months of purchasing inactivity, there is a huge log jam in the housing sector, trapped due to the lack of available and affordable mortgage deals out there. That will soon change. The housing market will stabilize and grow and the Dow will follow suit. This crazy packaging of debt and subsequent insuring of those packages will never return, but that is a good thing, not a bad thing. So cheer up everyone!

Posted by: Rob Bonnar | October 14, 2008 8:45 AM

Posted by: benq11 | October 14, 2008 12:48 PM

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