The bailout bill and stock market: what next?

It’s not over yet. Voting is still open and it appears there will be some vote trading to protect vulnerable house seats.

My take? Getting to be a good time to be a buyer…might wait a few days. Or maybe today is the day. Stocks down 6%. They might shoot back up tomorrow if the measure passes.

It’s over now. But it will be back. I believe the markets are overreacting. Not that I know much about credit, but underneath everything, all our work and property still has value. The market, down over 6% as I write, will come back. If a bailout is ever passed, they will come back then. But there may be something to those who say the firms should be allowed to sort it out themselves. All the work they all did still has to be done. Someone will do it. It’s just different people who will be benefitting from the profits.

hope I’m not whistling past the graveyard!

Sueanne Thank you for the link.

It just goes to show you that neither side (Democrats or Republicans), on whole, has the best interest of the people as their chief concern.

Many have stated that a bailout, in short, sucks. But it sucks less than having the entire economy implode. They (and more importanly their consituents) just need time to absorb all of these unpleasant facts.

What SHOULD happen: Congress actually takes some time to create a bill that makes some sense and really looks at it from all different standpoints before passing it.

What WILL happen: Some dude will write some stupid bill with tons of flaws in it and in 7 years, when I’m done with college, I won’t be able to find a job.

It’s a mistake to look at what happened yesterday and say “Whew, that was close”

Historical economic failures don’t happen overnight or in a 24 hour period. It is like a major earthquake. Over a period of time you get increasing small tremors, then boom-all fall down.

In 1929 the market was having pretty erratic jumps and declines but trending upward. However between Sept 3 and October 24 there were declines with smaller recoveries and in that 6–7 weeks there was a loss of 21%. Then on the 24th there was a drop of 9% for the day. There was an attempt to rally but 5 days later a full investor panic set in and Katy-bar-the-door, it was all over.

We are seeing erratic ups and downs this year, too. While govt controls will prevent a recurrece of 1929, we see a transfer of investment fom the stock market and bank instruments to T bills. There will be less available credit with a scaling back of inventory purchases and hiring with the resulting increase in unemployment, more .

This will not be the big crash of 1929 but a longer period where instant gratification will become just a memory. The pain will only go away when the political luddites admit that a big complex country has big complex problems and requires a big complex government