After the Dow being off around 1K points over the past week to ten days, a rally (though Fed induced) was to be expected. Anyone shorting heavy here or waiting for some more positive movement?
Thats the problem, (fed induced) just like the last one on Jan 22nd when they lowered rates 75BP, seems everytime it drops below 11700 they do something to prop the markets back up, they should have at least waited 2-3 more days, this is the kind of rally you want to see WITHOUT anyone stepping in and adding some kind of fed cut or propping it up with some new liquidity programs. I just sold the long positions I took on Fri and Monday for profits, I dont care, sell the rallies and buy the dips, today is not a day to be buying, however I DID BUY DUG, but thats an inverse ETF.
Once again you show that you have very little understanding about monetary policy and the financial markets . . . this latest move by the Fed is about COLLATERAL on the balance sheets of the banks.
One of the pieces of the puzzle I was concerned about (from Calculated Risk): Foreclosure-related 401(k) Withdrawals Up This is ugly: Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills â and getting slammed with taxes and penalties in the process, according to retirement plan administrators. . . . Such hardship withdrawals began rising last year and, by January this year, had exceeded January 2007 levels. During the first month of the year, as the economic slowdown tightened pressure on mortgage holders, hardship withdrawals rose 23% at plans that Merrill Lynch (MER) administers, compared with the same period in 2007, says Kevin Crain, managing director of the Merrill Lynch Retirement Group. The 401(k) withdrawals are rising mainly because people such as Campbell and her husband want to save their homes. Merrill Lynch found that the primary reason for the rise in hardship withdrawals was to prevent foreclosure or eviction, based on its sampling of applications filed in January. Likewise, in the first month of the year, compared with January 2007, Great-West Retirement Services saw a 20% increase in hardship withdrawals to save a home. And Principal Financial (PFG) reports that in January it received 245 calls from participants who inquired about 401(k) withdrawals to prevent a foreclosure or eviction, up dramatically from 45 similar calls it received in January 2007.
A better question: Can banks and IB's recoup a better part of their losses in 30 days - on 200 Billion borrowed cash? Dont think so. What happens to the market when the margin call arrives 30 days from now? Think those IB's can do 50% or 100% in 30 days?