If you figure what the crash of 29' did for the economy, you'd have to assume aversion processes are in place for this. We prop the banking system, the dollar, airlines, etc. this is only common sense. Too bad that short term fixes have reality as a shadow.
The damage was not from the crash itself but from the extremely tight monetary policy adopted right after.
I would give up two possible scenarios. The first is short covering. The short level is very high, and since each sell off has rallied it is hard to press shorts, so they cover. The second is that there are several indicators that indicate a short term oversold condition. So maybe we are starting to form a base. But I suspect that sept support will prove to be pretty significant resistance on any rally. Especially on the spazdaq. belly's rumbling hope everyone has a good weekend.
The New York Federal Reserve has stepped in on a number of occassions and started buying index futures to try to stabilize things. Wouldn't be a surprise if there was a little of that going on after the Worldcom blowup too.
you're right Babak. Crashes are nothing...It's the darn refusal to create more money that messes things up...
It doesn't have to be men in black The futures crash on the WCOM news in the premarket, then the market says, hey, that stock was already under a buck when this news hits, so maybe we're over-reacting, and the market moves up. Then the Xerox news hits for Friday. The market says, hey, if we could digest WCOM, then maybe we have no reason to panic over a dispute between the regulators and KPMG over how to book Xerox's sales. By the way KPMG still stands by their original numbers and I would take their expertise over the other dopes. Maybe I'm wrong and men never did walk on the moon etc, the government is acting weird again yada yada or maybe just a lot of dudes saw it the way I saw it.
This accounting thing has so many layers that we're just starting to see. Before it is all done I'd be surprised if they (the big 4 now lol) all don't have more than a little dirt on their hands. I don't think Anderson was unique in its "creativity". The whole accounting industry may have to reform before it ends. After that let's go after the legal industry. Won't that be fun?
As a former lawyer I would like to say it is the lawyers that will save this country. (Especially if they can make a buck doing it.) As long as the legal system is well designed it can and should create incentives for people to do private good. That is where the lawyers come in. By the time they are done ripping the wall street crooks and big 87654321 accounting firms a new one they, the crooks, will be begging (paying) congress to regulate them. (By the way I am hopeful that the lawyers will clean out my church too. ) So you see when Shakespeare said the first thing you need to do is kill all the lawyers --- you have to understand the context. He was saying lawyers prevent abuse. Now I know lawyers can be greedy crooked jerks too, but they can still serve society.