Thursday, January 29, 2009

Learning Expensive Lessons on the Job

Yesterday was a follow-through day on Wall Street signaling the start of a new rally. Nothing terribly exciting about that since rallies can fail pretty quickly and in the past 12 months they usually have. Still, no bull market can get started without there first being a follow-through and confirmed rally-- so, it was better than a sharp stick in the eye for traders. Then this morning a story made the rounds, in the wake of ZERO Republican votes in the House for Lord O's huge spending bill. The story was that the megabill had 12 cents of every dollar pointed towards stimulating the economy and 88 cents of every dollar attached to long wished-for Democrat spending schemes.
The market opened down and continued down all day. However, there was some hope that the final hour would see buyers come in and save this newborn rally. Not so fast. Obama had one of those photo-ops with questions in the final hour of trading and he used it to vent his spleen about bank executive pay. That's all well and good but what really caught the ear of traders was when he said that there would be a time for banks to make profits again but this was not the time. When the POTUS says that a business, especially a business currently being big-footed by the feds, shouldn't expect to make a profit this year... well, why would anyone own shares in such a venture? Does this kid even know what the stock market is? Does he know what equities are? Doubtful. Predictably, financial stocks got hammered in the final hour and lead the market lower.

This kid has a lot to learn about shooting from the lip. Sitting next to him was Slow Joe Biden when he made this costly mistake. Earlier in the day Joe told CNBC that he wanted to throw executives who were paid a bonus in 2008 "into the brig."
Lord O should keep in mind what Joe would say-- and then NOT SAY IT!