Is the market Bullish?

[deception]

http://www.nytimes.com/2009/07/21/business/21markets.html?ref=economy

The broad stock market leapt to its highest level since the bleak days of November on news that the index of leading economic indicators, which is used to spot peaks and troughs in the economy, rose in June for a third consecutive month — something it had not done since 2004. Hopes that the CIT Group, the troubled commercial lender, would avert bankruptcy added to the buoyant mood.

The Dow Jones industrial average rose 104.21 points, or 1.19 percent, to 8,848.15, driven by big gains in Caterpillar, Alcoa and Walt Disney. Since June 10, the blue-chip index has gained 8.6 percent to land back in positive territory for the year.

The S.& P. 500 jumped 10.75 points, or 1.14 percent, to 951.13, its highest level since November. It has gained 41 percent since early March.

The Nasdaq composite index climbed 22.68 points, or 1.2 percent, to 1,909.29.

The index of leading economic indicators rose 0.7 percent in June, the Conference Board reported. Seven of the 10 leading indicators released Monday — including building permits, stock prices and initial jobless claims — improved in June. Analysts now say that another strong week of earnings reports could lure hesitant investors back into the fray and begin the next bull run

As of last week, 71 percent of the companies in the S.& P. 500 reported earnings that surpassed expectations, according to data compiled by Thomson Reuters.

Adding to the optimism on Monday was news that CIT, one of the nation’s largest lenders to small and midsize businesses, was nearing a deal for emergency financing. On Sunday, the company’s bondholders agreed to supply a $3 billion emergency loan that would buy some time for the 101-year-old company to restructure its looming debt burden outside of bankruptcy.

Analysts said that the markets are now pricing in expectations that reports later this week will show a decline in oil inventories in the United States. Moreover, a sudden pickup in demand from China in particular, analysts say, could be expected after Beijing officials reported growth of 7.9 percent in the second quarter, comfortably surpassing projections.

 

[Denny Crane]

http://www.politico.com/news/stories/0709/25164.html

Bailouts could cost U.S. $23 trillion


A series of bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23 trillion, the U.S. government’s watchdog over the effort says – a staggering amount that is nearly double the nation’s entire economic output for a year.

If the feds end up spending that amount, it could be more than the federal government has spent on any single effort in American history.

For the government to be on the hook for the total amount, worst-case scenarios would have to come to pass in a variety of federal programs, which is unlikely, says Neil Barofsky, the special inspector general for the government’s financial bailout programs, in testimony prepared for delivery to the House oversight committee Tuesday.

The Treasury Department says less than $2 trillion has been spent so far.

Still, the enormity of the IG’s projection underscores the size of the economic disaster that hit the nation over the past year and the unprecedented sums mobilized by the federal government under Presidents George W. Bush and Barack Obama to confront it.

In fact, $23 trillion is more than the total cost of all the wars the United States has ever fought, put together. World War II, for example, cost $4.1 trillion in 2008 dollars, according to the Congressional Research Service.

Even the Moon landings and the New Deal didn’t come close to $23 trillion: the Moon shot in 1969 cost an estimated $237 billion in current dollars, and the entire Depression-era Roosevelt relief program came in at $500 billion, according to Jim Bianco of Bianco Research.

The annual gross domestic product of the United States is just over $14 trillion.

Treasury spokesman Andrew Williams downplayed the total amount could ever reach Barofsky’s number.

“The $23.7 trillion estimate generally includes programs at the hypothetical maximum size envisioned when they were established,” Williams said. “It was never likely that all these programs would be ‘maxed out’ at the same time.”

Still, the eye-popping price tag provoked an immediate reaction on Capitol Hill. “The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn’t even imaginable,” said Rep. Darrell Issa (R-Calif.), the ranking member of the House Oversight Committee. “If you spent a million dollars a day going back to the birth of Christ, that wouldn’t even come close to just one trillion dollars – $23.7 trillion is a staggering figure.”

Congressional Democrats say they will call for Treasury to meet transparency requirements suggested by the inspector general, said a spokeswoman for the Oversight committee. “The American people need to know what’s going on with their money,” said committee spokeswoman Jenny Rosenberg.

 

[Denny Crane]

Hmmm.... 2000 years x 365 days x $1M = $730B.

 

[Shapecity]

There's not many other places to put your money and hope for some sort of ROI. CD rates are crap, Savings rates are crap, Real estate is crap, etc.

Stock market is the only game left to play.

 

[deception]

There's not many other places to put your money and hope for some sort of ROI. CD rates are crap, Savings rates are crap, Real estate is crap, etc.

Stock market is the only game left to play.

home sales are up and economy might have its mojo back

http://www.nytimes.com/2009/07/24/business/24markets.html?_r=1&hp

“The housing market does point to signs of stabilizing and that obviously is key to consumer confidence to begin to rebuild,” Mr. Cardillo said. “If we see daylight in the housing market that will give another indication that the economy crawling out of recession in the fourth quarter is achievable.”

Markets on Wall Street and in Europe moved higher on Thursday, with the Dow pushing past 9,000 for the first time since early January.

Thursday’s push was fueled by some better-than-expected earnings reports, including one from the Ford Motor Company, and the latest government report on housing, which said that the sale of existing home rose 3.6 percent in June, the third consecutive monthly increase.

Ford, meanwhile, surprised Wall Street somewhat by reporting a $2.3 billion profit in the second quarter, mostly because of cash gains from debt restructuring. Excluding the one-time items, Ford would have lost $638 million, or 21 cents a share, still a significant improvement from the $1.4 billion that it lost on continuing operations a year ago and less than half the loss analysts were expecting.

That along with better earnings from other companies, including the drug maker Wyeth and the telecommunications provider AT&T helped push markets on Wall Street up by more than 2 percent.

Traders have also gotten some reassurances from Washington. On Tuesday, the chairman of the Federal Reserve, Ben S. Bernanke, told Congress that the economy was finally improving, although it came with a warning.

“Job insecurity, together with home values and tight credit, is likely to limit gains in consumer spending,” Mr. Bernanke said, noting that the unemployment rate has continued to rise steeply. If that were to continue, the current gradual recovery could “prove transient.”

European markets also rose on the economic news in the United States.

The FTSE index in London closed up 66.07 points, or 1.5 percent, at 4,559.80 — its ninth consecutive increase, while the DAX in Frankfurt gained 125.72 points, or 2.5 percent, to close at 5,247.28, a high for the year. And the CAC-40 in Paris was 68.65 points, or 2.1 percent, higher at 3,373.72, which was near its high for the year.

Shares in Tokyo and Hong Kong also finished higher

 

[Shapecity]

I think it's a dead cat bounce for the current real estate numbers. Historically homes sell better this time of year so there's going to be an increase from prior months. There's also been a lot of manipulation by banks to control the supply and demand of homes. I predict there will be another dramatic drop in real estate pricing.