Drudge Retort: Red Meat for Yellow Dogs
Friday, November 21, 2008

U.S. stocks rallied and the Standard & Poor's 500 Index rebounded from an 11-year low after President-elect Barack Obama picked New York Federal Reserve Bank chief Timothy Geithner to head the Treasury.

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This news could really give the stock market a badly needed shot in the arm," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, wrote in an e-mail to clients. Geithner is a "fantastic choice to help lead the financial markets out of the wilderness."

Citigroup Inc. pared a 35 percent slide and JPMorgan Chase & Co. trimmed a 16 percent tumble in the final hour as a Democratic aide said Obama will name Geithner to replace Henry Paulson. National-Oilwell Varco Inc. and Chesapeake Energy jumped more than 20 percent as oil rose for the first time in six days. The rally came after this week's rout dragged the S&P 500's price-to-earnings valuation to the cheapest since 1995.

The S&P 500, which capped a third-straight weekly decline, gained 6.3 percent to 800.01. The Dow Jones Industrial Average rose 494.37 points, or 6.6 percent, to 8,046.66, while the Nasdaq Composite Index added 5.2 percent to 1,384.35. Almost five stocks gained for each that fell on the New York Stock Exchange.

Benchmark indexes swung between gains and losses earlier as growing concern over the survival of Citigroup offset a rally in commodities producers.

Obama sure knows how to pick 'em.

Any specualtion on where Bill Richardson or Colin Powell will fit into the all star team that Obama is poutting together here?

Spud thinks Powell is a natural fit as Sec Ed and that Richardson should be Sec Interior.

Be Well.

Spud - there was a blurb earlier that Richardson will go to Commerce.

We can neither blame, nor credit the Messiah until he is sworn into office.

All civil servants can look at Geithner's resume and realize that if they work hard, they, too, can rule at least part of the world.

At the same time, these civil servants can examine Geithner's biography and realize that it also helps to make a few good friends along the way to power.

An apprenticeship with Henry Kissinger doesn't hurt. Be sure, too, to get to know a few secretaries of the Treasury and a few Wall Street CEOs.

As a young man, Geithner spent many years living abroad, primarily in Japan and India, moving around because his father was a program officer with the Ford Foundation.

He graduated from Dartmouth College and John Hopkins University with an emphasis in international studies rather than economics.

"Since college, he has pretty much gone straight up the ladder," Gary Weiss writes in Portfolio. "No detours, no backpacking around Europe, no internship fetching coffee."

Geithner's first job was with Kissinger Associates, where he worked with the former secretary of state.

From there, he went to the U.S. Treasury Department, where he rose to become an aide to Lawrence Summers and Robin Rubin, treasury secretaries under Bill Clinton.

He assisted these leaders in putting together bailouts, not of companies but of nations, including Mexico and Indonesia.

During the late 1990s, Alan Greenspan, then the chairman of the Federal Reserve, also noticed Geithner.

"That whole period was one long crisis," Greenspan told Portfolio. "(Geithner showed) a general understanding of the nature of what the problems were and what was required to right the system."

Geithner's circle of advisers and mentors was expanded in 2003 when he became head of the New York Fed, the most powerful of the government's 12 regional banks.

When Bear Stearns, an investment bank, began to bleed money earlier this year as a result of the collapse of the sub-prime mortgage industry, the New York Fed took on damage-control duties.

Geithner served as the point man in the talks that led to the Federal Reserve's loan of $29 billion to assist J.P. Morgan Chase & Co. in its buyout of the assets of Bear Sterns.

Whether or not the Fed did the right thing is reflected in the title of Weiss' profile of Geithner, "The Man Who Saved (or Got Suckered by) Wall Street."

That profile and profiles in other publications depict Geithner as extraordinary well-connected.

His informal group of advisers includes E. Gerald Corrigan, a managing director of Goldman Sachs and a former New York Fed president; Treasury Secretary Henry M. Paulson Jr.; John Thain, the CEO of Merrill Lynch; Paul A. Volcker, the former Fed chairman; and Peter G. Peterson, the former U.S. secretary of commerce.

James "Jamie" L. Dimon, the CEO and chairman of J.P. Morgan Chase, is a Geithner ally and a member of the board of the New York Fed.

This connection has raised some eyebrows, for it meant that in solving the Bear Stearns mess Geithner approved a $29 billion loan to a company run by a member of his board.

But Geithner argued that J.P. Morgan met the Fed's criteria, as it was "a sound institution" that could pay back the money. Bear Stearns did not meet this test.

Except for the last two paragraphs - not too shabby. Let's see if he bails out any other friends and then wait for the DR left response - if there is any.

Scooped by a potato.
Oh well.

At this time the most important change would be Secretary of the Treasury

Agreed.

Sec State is almost an afterthought behind Sec TReasureer and AG.

Scooped by a potato.
Oh well.

~Zat.

Spud expressed a similar sentiment after finding himself scooped by Doc Sarvis on the NIC intelligence report projecting a lessening of US power by 2025.

Be Well.

So the market sold off over 2000 points when Barack was elected, but it rallied 500 when Obama selected a new Treasury chief?

LOL. If only. Between options expiration and a quote from Warren Buffett that Obama wouldn't be raising capital gains taxes, it made for a wild day.

We'll see if it's real, by about next Wednesday. I'm short.

Heh. There you go again thinking the whole world buys into your little RWNJ conspiracy theory about Obama crashing the economy.

LOL indeed.

I don't believe it. And neither do I believe that Obama picking a guy to show up for work two months from now caused the market to go up 500.

But you can feel free. Maybe Obama has a few other tricks up his sleeve, we can be back to 14,000 in a mere 12 trading days.

Dead cat bounce. Buy gold.

Meow meow says the kitten.

Gold just picks up dust during deflationary periods. The boomers are coming to the end of the line...try bedpans.

"try bedpans"

Or repo companies, payday loan places, or dollar stores.

"I don't believe it. And neither do I believe that Obama picking a guy to show up for work two months from now caused the market to go up 500."

I probably agree with you about that, can't be sure of course but what I can be sure of is that the Bush presidency has had a very dramatic effect on the stock market as well as the rest of the financial institutions around the world, a very negative effect. Hooveresque.

Hooveresque.

#14 | POSTED BY DANNI

Every POTUS since Carter has sought to dismantle the greatest economy that the world has ever seen in the name of cheap labor and the myth of free trade.... nothing more than a thinly disguised rouse to exploit impoverished nations to eliminate labor and health standards in order to enrich the CEO's and Boards of Directors.

This "rally" was not based on some pick buy BO the name dropper!

"I don't believe it."

"This "rally" was not based on some pick buy BO the name dropper!"

finance.yahoo.com

www.google.com

Too funny.

Yav, get back to me when you acquire some credible investment knowledge and experience.

Sorry, the dow has roughly 5000 more points to drop before we get anywhere near a turn-around.
And this fellow helped get us to this point.

The last bubble boys and girls, is the US dollar.
Not really even a bubble.
More than 50% of this nations wealth has evaporated in the last 12 months, never to return.

There are roughly 121 million employed citizens in this country at this time.
At this time next year, that number will have fallen to some 65-70 million.

Interesting that the powers that be are now openly discussing the D word.

Deflation IS the end of the cycle.

YEAH!

This is where the wingdings deny BO's pick impacted the market ---- the day after they said his not saying who was his pick was hurting the market!

the trite "right" really has its game on!

This is where the wingdings deny BO's pick impacted the market ---- the day after they said his not saying who was his pick was hurting the market!
* * *

Ummm--who said that, stupid?

"There are roughly 121 million employed citizens in this country at this time.
At this time next year, that number will have fallen to some 65-70 million.

?

"Ummm--who said that, stupid?"
#21 | Posted by rightisright at

Karl Rove, Sean Hannity, Boortz, Barnes, cavuto, ect ----- You know, all your leaders!

Unemployment the likes of which no citizen has ever seen.

People buying and selling based on rumors and news which changes daily must be nervous wrecks.

People who use vaste stores of capital and information inside Government and Corporate planning rooms make markets. They use their power to leach off of everyone.

Example: Soros once attacked and destroyed the British pound making billions off that countries citizens in a few weeks. He admitted as much on 60 minutes and made the point that his hedge fund incurred no risk, because under the circumstances at the time, it could not lose.

Today these people suck more money out of our economy than ALL OUR TAXES. Citizens get nothing in return. As Kramer might say, they contribute NOTHING to society. Their selfishness, legalized by the likes of George Bush and Phil Gramm have brought us to the same economic cliff with leveraged bets that exceed the value of all tangible assets. Friedman Chicago School of economics. Paulson, Rubin, Rocerfeller, Rothschilds... a tight knit group that do what they want because they own us all, lock, stock and barrel.

Karl Rove, Sean Hannity, Boortz, Barnes, cavuto, ect ----- You know, all your leaders!

#23 | Posted by Redneckville
* * * *

I'll have to take your word for it.

So how many stocks did you buy, on the Geithner announcement? And which ones?

And life gets interesting here in NJ. Our governor was on the short list, but I guess that he ain't getting the job. Now he will have to make a bid for re-election next year. He's probably going to be facing off with a very popular Republican, former US Atty. Chris Christie. He's going out now that Obama won.

this could make is own L.H.H.M.

for days we have been saying that the market has been floping because obama is going to steal us blind and the smart people are getting out while they can and the left called us names and 'poo pooed' that completely

and now it goes up right after this guy was named and its ALL BECAUSE OF AN obama pick of this guy

typical liberal hypocrisy moment right here and now and we dont even need the wayback machine

so obama's election DOESNT affect the market badly but this guys selection DOES affect it

just wanted to make sure I got it right...

It has dropped how much since the election? It looks like everyone dosen't believe king ears is the answer.

LOL The right wingers are out in force blaming Obama for a financial crisis caused by the reckless abandonment of oversight and regulation by the GOP.

Uh, why did Paulson wait until the flames were coming out of the roof for all to see to sound the alarm? He had this 'bailout' plan drawn up months before the rest of the public was aware of the degree of trouble markets and banks were in.

One can only surmise they were praying this would wait until January 21st. Oops

LOL The right wingers are out in force blaming Obama for a financial crisis caused by the reckless abandonment of oversight and regulation by the GOP.

this shows complete short sidedness......

you completely disolve dems from blame knowing full well that frank and dodd could have done something about this all along and DIDNT and in fact probably made it worse..........

too bad...you USED To show such promise....hee hee

Had you started shorting the market on the day Obama won the Iowa caucuses, you would have made a fortune. Is it coincidence? Is it a coincidence that 2008 will go down as the worst year in history?

It was a classic feedback loop: Obama's poll numbers went up, markets started going down, which caused his numbers to go higher, pushing markets lower still. The two days following the election were the worst two days in market history, followed by two worse ones earlier this week. Surely the markets can't be concerned with what Bush is likely to do in the next four weeks. But we've every reason to wonder what Obamanomics will bring over the next four years.

Countrywide collapsed January 13th
Bear-Stearns bailed out May 14th

Paulson was aware of the looming crisis, had his three page bailout plan drawn up months ago, yet somehow Obama is to blame for any of it? The financial crisis and mortgage meltdown began long before the general election even began.

Why would the markets react negatively to an Obama election when he represented a different course than McSame's deregulation and status quo?

The logic involved in reaching that conclusion is as twisted as a pretzel.

I don't know any liberals who are buying stocks. Bonds, even. Not one. Do you? After all, if they're confident in Obamanation he'll be bringing in, why don't they invest accordingly? Are they out of money? Did they have any to begin with?

By the way--how is Warren Buffett's portfolio doing? Still down 50%? And he's on Obama's speed dial?

Why would the markets react negatively to an Obama election when he represented a different course than McSame's deregulation and status quo?
* * *

Umm--deregulation is hardly the status quo. Since the government has been buying up banks and telling them how to lend, none of them are. The mortgage market was regulated. So was the insurance market. So are annuities. The Great Warren Buffett sat on the Board of Directors of AIG, running up over two trillion dollars in liabilities, all the while boasting that he doesn't pay enough income taxes and that we should elect Obama to make him. So why should the markets not react negatively, when Obama has again found himself knee-deep in douchebags? He can't seem to help himself.

The mortgage market was regulated

RiR

Deregulation allowing "credit derivatives" to fund mortgages (slipped in by Gramm) is at the crux of that particular crisis on Wall Street and Main Street.

Suddenly, massive amounts of available mortgage money flooded the market, and thousands of storefront mortgage companies began flooding mailboxes with offers that were, in fact, too good to be true.

I shredded at least 10 equity line offers a week with 0% introductory rates.

Bush's 'ownership society' was funded by the smoke and mirrors of using credit, his wars and financial hijinks by piling up massive debt.

Look at this chart of debt under Democrat and Republican presidents. This one only goes to 2006. 2007 and 2008 went off the chart - literally.

Debt accumulated under Democrat and Republican Presidents

Takes two to tango. As horrible as Bush has been, countless Dem senators and legislators helped make it possible. Good luck getting Chuck Shumer or John Corzine or Robert Rubin to the table to regulate their Wall Street buddies, or Barney Frank or Chris Dodd to consider whether Fannie and Freddie might be getting too aggressive in their lending.

Difference between Bush and those other guys? Bush will be out of a job in two months. Stupid Democratic voters sent all the others back for another round.

"Takes two to tango. As horrible as Bush has been..."

The American public doesn't do nuance. History might record some Congressional players as footnotes; the public's memory remembers the current occupant and assigns all the credit and blame there.

The attempt to dilute Bush's part in all this by naming Shumer, Corzine, Rubin, Frank, Dodd, etc. will fail.

Doubt that? Name their Congressional counterparts in say, September, 1929. The president then? Herbert Hoover.

Hans

RiR,

Its fucking ridiculous to blame Obama for the chickenhawks coming home to roost from eight long years of destructive false economic policy. Conservative policy for the small people Grand Giveaways for super crony capitalists. Not just Bush's fault, its was Cheney's plan all along.

19 other countries refused to even shake Bush's hand at the close of the G20 conference held in Washington DC of all places. After listening to Bush laud "free markets" they charted a differnt course.

Fools once, Fools twice
You show me 3>4 days of 400+ Dow gains maybe!
Nasdaq hit 52 week low @ approx 2:45 and you tell
me a Miracle has happened with appointment
just after 3 PM. Yea I caught a piece of that Long.
Now I'm ready to Short it on Monday.
THERE IS NO GOOD NEWS!!!!!!

When You are banging off of Market Bottoms
""ANY"" positive news will PLUS positive bias
and as this moment the Futures are DOWN biased
until Asia Opens Sunday PM and swings +/-

The attempt to dilute Bush's part in all this by naming Shumer, Corzine, Rubin, Frank, Dodd, etc. will fail.
* * * * *

So? It doesn't make it any less true. And if Obama hopes to make any progress, best to ignore the advice of the dumbasses in Congress who helped put us into this mess.

Will he? So far, his record isn't encouraging. Biden is his VP, after all.

#7 RisR YEP Short Guns Loaded! I'll play the Long
action for what it's worth in the Swing

Takes two to tango. As horrible as Bush has been, countless Dem senators and legislators helped make it possible. Good luck getting Chuck Shumer or John Corzine or Robert Rubin to the table to regulate their Wall Street buddies, or Barney Frank or Chris Dodd to consider whether Fannie and Freddie might be getting too aggressive in their lending.

Difference between Bush and those other guys? Bush will be out of a job in two months. Stupid Democratic voters sent all the others back for another round.

#37 | Posted by rightisright at 2008-11-22 07:30 PM | Reply

Sometimes you just have to re-read and re-post crap that is so ridiculous it's unbelievable.

#41 And therein Lies the problem of any market stabilization, there are countless Trillions
ready to fly back into this but one wrong word

#41 should read #42

Stupid Democratic voters sent all the others back for another round.

#37 | Posted by rightisright at 2008-11-22 07:30 PM

And the Independent voters who were just as sick of the GOP, their failed policies, and empty rhetoric as the rest of us who didn't have our heads in the sand.

"So? It doesn't make it any less true."

The American public doesn't do nuance. History might record some Congressional players as footnotes; the public's memory remembers the current occupant and assigns all the credit and blame there.

The attempt to dilute Bush's part in all this by naming Shumer, Corzine, Rubin, Frank, Dodd, etc. will fail.

Doubt that? Name their Congressional counterparts in say, September, 1929. The president then was Herbert Hoover.

Hans

Point taken and IF there is ChanGe are the current
members of house and congress involved with
said Fannie/Freddie and such dealings thru hearings
be found "involved" Will they be Ousted?

Hell They Just Got A Reward! Total Immunity to Rape and Pillage the taxpayers for more via the vote.
What a screwed up deal.

I'm double short. FXP is my favorite, double short the China index. I also like EEV and EFU, which go double short emerging markets. I've pared back my positions in SKF, though--even in my wildest dreams I didn't expect the financials to implode the way they have, so quickly.

I wish there were a pure double-down play on the insurance companies. They're next.

Sometimes you just have to re-read and re-post crap that is so ridiculous it's unbelievable.

#44 | Posted by sitdown
* * * *

In two years, when things are worse than they are now, and you don't have George Bush to blame for it, go ahead and tell me how unbelievable it all was. Oh--and be sure to be buying stocks--it would be a shame for your libtard pals in Congress to not enjoy the pleasure of having you put your money where your mouth is. Assuming you have any.

Fact is, this was a credit cycle unwinding. As long as you have people hungry to lend at ever-lower rates to people who can't pay back, it's just a matter of time. And that's what's been going on.

Now, the bills are coming due, and there's no money to pay them. Thus, deflation. Had Kerry won in 2004, it would have made no difference. Had the Republicans held onto Congress in 2006, it would have made no difference. And poor Barack is like a guy shooting the rapids, hoping to keep barely afloat while circumstances dictate his actions, instead of the other way around.

When You are banging off of Market Bottoms
""ANY"" positive news will PLUS positive bias
and as this moment the Futures are DOWN biased
until Asia Opens Sunday PM and swings +/-

#41 | Posted by realplus5
* * * *

We didn't spend the last two months forming a market bottom at 7800-8000, but rather a top. We won't see it again for years.

Yes, this is horrible, yes there is blame to be spread way beyond Bush and his miserable stewardship. But when certain lib economists were honking their horns a year, two years ago saying the administrations policies were exasperating a house of cards scenario, I remember many righties on this blog, and on the noise channels, calling those economists -- mostly center left -- naysayer, doomsayers and fools. Just like they did to folks that protested the bullshit war.

The right deserves the share of punishment because they've been wrong every step of the way and have stood in the way of avoiding mistakes and disaster while hawking a past-due model of faux patriotism as their purpose. The right still refuses any responsibility, shows no accountability, after 6 out of 8 years in charge, and 8 in the WH.

If things do go totally toilet, history will look to these previous 8 years as the great unwinding due to sickeningly inept leadership and promotion of a jingoistic incuriousness as a badge to be worn with dunderheaded pride. The brand is rotten, good. But the stink of the brand now clings to the nation, if not the world, and that is almost evil that we have allowed this to happen. As I said, blame goes beyond W. Libs and Dems are not blameless. But the fish rotted from the head down just as it always does. Fess up righties, you fucked your own country, the one you supposedly love, with your fools notion of that love.

Geithner, a lifetime public servant who's never worked on Wall Street, Larry Summers as chief of the economic council at the WH, in addition to the other stellar economic advisers should be quite a good brain trust. Lord knows it's going to take all the brains that can wrap around our ever diminishing economic future.

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