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Sigh...Monster Up Day Setting up

September 19th, 2008 at 05:31 am

The futures are currently pointing to a huge up day today on top of the 400 point surge yesterday.

As I look premarket GS is up $32 to $140. STT is up $6 to $65. WM is up a buck to $4. Hell, Apple is even up almost $8. Oil is at $97.5 probably going down today. Gold is down $54.

So what happened? Is everyone drunk? Is it like someone about to jump off the ledge and the sun comes out?

"U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke proposed moving troubled assets from the balance sheets of American financial companies into a new institution. "

and

"U.S. officials are considering include establishing an $800 billion fund to purchase so-called failed assets and a separate $400 billion pool at the Federal Deposit Insurance Corp. to insure investors in money-market funds, said two people briefed by congressional staff. They spoke on condition of anonymity because the plans may change. "

Source: http://www.bloomberg.com/apps/news?pid=20601103&sid=am.XqrSCUntI&refer=news

4 Responses to “Sigh...Monster Up Day Setting up”

  1. Broken Arrow Says:

    Yeah, huge movement with GS... and well, really the entire financial sector. Even if it has weakened somewhat right now.

  2. baselle Says:

    My regional bank stock, MI, took off like a balloon. Everybody's excited about RTC II. Just wait until Uncle Sam has to crank up the printing press to make more money to "cover" it. Could be October surprise, the 2008 edition.

  3. merch Says:

    Yea I was thinking about that. But all they programs are more if they are needed. Like the 400 billion for MM will only come into play if there is a rush to the exits and the PMs sell. If there is an orderly exit, the funds won't be used.

    As for the 800 billion, they haven't let out the details. I have to see how it is set up. Currently I don't expect the AIG or the money market thing to cost any money.

  4. Broken Arrow Says:

    I read an article that AIG has the assets to cover their liabilities. It's just not liquid enough to get to right now to stem their own losses. That's where the Fed comes in, with their generous loan. In return, AIG has to pay something like 11% on that loan! So, yeah, AIG should survive, and Uncle Sam not only shouldn't lose money, but more importantly, he may even make a nice profit on this.

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