This Mornings Markets-9/30/08

As of this writing DOW is up 305 points. Now 299 points. Now 286 points. It could bounce another 100 points one way or another. This information comes from Yahoo Finance.

A good portion of the up tick are people, like myself if I had any funds in the market, taking advantage of stocks that dropped significant amounts yesterday are buying today. If I was a day trader with significant funds a unbelievable amount of money could be made merely due to the volitity of the markets. MSNBC stock market analyst just analyze the markets the same way.


I agree that the mess isn’t over. In fact the Dow continues to drop at a slow rate. One of the most important continous media talking points, and you are hearing the same from economists, is simply false. It’s simply untrue. They continue to say that the mortgage tranches being sold to the Treasury are WORTHLESS. This is simply untrue. Those instruments are backed by real estate. Whether the value has dropped, whether the buyer has defaulted those instruments have tangible value.

2 components make them unmarketable right now. The fact there isn’t a helluva of a lot of liquidity on the street means most of the investment banks, not regular banks on the street, had no way to purchase the tranches made up of 10,000’s of thousands of mortgage. That’s the other issue, since they are made up of thousands of individual mortgages are very hard, if not impossible, to value the individual pieces of real estate and therefore extremely the larger collection of them.

10% of mortgages are late on their payments. 10% are in foreclosure. 80% are making their payments on time! 80%

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4 Responses to This Mornings Markets-9/30/08

  1. Stuart

    What I get from progressive bloggers and economists is that they’ve all seen this mess coming for a while and they know it’s a mess/crisis — but they don’t agree with a blank check or blanket power to the Bush administration to fix this.

  2. DeanOR says:

    Progressive blogs generally agree with the lead sentence in the Roubini article that you link to.”It is obvious that the current financial crisis is becoming more severe in spite of the Treasury rescue plan (or maybe because of it as this plan it totally flawed).”Do you think Congress should have passed a totally flawed plan today that could make the situation worse instead of better, and at enormous cost?