If you believe in market manipulation by the government, it would seem pretty likely.
Recession watch: May
- Thread starter Integral
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If you believe in market manipulation by the government, it would seem pretty likely.
innonimatu
the resident Cassandra
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I don't know, but I'm guessing that both Google and Apple are overvalued, liable to fall in price quite a bit. The DOW weights the absolute value of stock: adding a company with high-priced stock would lead to a LARGE fall of the index if the stock price were to fall. Apple, Google, and especially Berkshire Hathaway are therefore very dangerous to add: a fall of one of these stock even by half could have an effect capable of setting a panic.
There was a reason why many companies (mostly banks) have been kept on that index for so long despite its stock having fell under the $10 limit: further falls will barely move the index. Replacing those with high-priced stock will allow again for large falls...
Stolen Rutters
Deity
Sorry, I misread what you were getting at. I was wrong about when the delisting actually happens anyway so everything I said was moot. (delisting process started today but GM won't actually be pulled from the index until June 8th.)
I didn't think of it before but what innonimatu says 2 posts up makes a lot of sense. GM price is so low, it no longer has a significant effect on the index. So I believe you are right, it's a general confidence builder effect rather than anything happening to GM's stock.
It is a bit ironic now that I think about it from another angle, isn't it?
Integral
Can't you hear it?
May economic summary in graphs
Also, gas prices might go down soon. Just a feeling. (then again, it might also manifest itself as a reduction in the usual summer price spike.)
Also, gas prices might go down soon. Just a feeling. (then again, it might also manifest itself as a reduction in the usual summer price spike.)
innonimatu
the resident Cassandra
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By the way, I just saw the american president stating that he "had no interest in running GM" and that GM would continue to be run by "a management team with a track record in American manufacturing that reflects a commitment to innovation and quality". How keeping the same management minus the CEO would fit that description defies reason... And apparently (so the journalist said) he was making that statement to reassure americans.
Are people over there insane or what? I mean, the company just went bankrupt! How can an announcement that the management which led it to bankruptcy will be retained reassure anyone?! And he apparently believes himself capable of running a country or appointing people to run things there, but appointed someone to run a single company inside that country is beyond the ability of his government?
I doubt gas prices will go down so long as the USD falls from Ben Bernankes monetary expeditions.
Now imagine being on the wrong side of trades since March 9th...
I can't resolve how one can be optimistic going forward for anything in the American economy unless theyre stoned out of their mind. The only good news has been second derivative crap (and that's awfully weak) and painted ticker tape courtesy of a full government backstop.
Me too. People are falling for a ruse.
And GM wants to keep making SUV's, because it will pay off if gas remains "cheap". Taxpayers have 60%, and UAW 18%, but they want them to "stay out of decision making"
And of course the article I just read blamed labor costs and perks, not bad management decision, for the meltdown.
Me too. People are falling for a ruse.
And GM wants to keep making SUV's, because it will pay off if gas remains "cheap". Taxpayers have 60%, and UAW 18%, but they want them to "stay out of decision making"
And of course the article I just read blamed labor costs and perks, not bad management decision, for the meltdown.
The Fed and Treasury fundamentally believe that this has always been a crisis of liquidity and that if they could grease the skids enough people would get money going again. It's pretty amusing to see how the actions contradict themselves and how credulous media hacks backslide into explanations like "Rising Treasury Yields mean investors have gained an appetite for risk again". If the recovery hinges on low interest rates and affordable credit you sabotage it by changing the price of "risk-free" investments by making them losers in the long term. China laughs at Timmy telling them their investments in Treasuries are safe.
Until the government stops messing with the bond market and stock market and lets us evaluate risk without them holding the hand of private companies, I'm going long oil and that's it.
I don't buy a significant price change from that for several reasons. The general inelasticity of demand means that future potential production doesn't really effect current demand. Since any supply from those sources are in the future at best, and speculative at worst, you have to consider what other changes of both supply and demand will take place in those time frames. Also, since it is located in a remote and hard to access area, you have to consider all of the choke points on the who journey from under ground to gas tank. And there are a lot of them.
I'd argue that long term supply and demand don't matter for oil. The value of exchange medium does. When the dollar goes in the toilet relative to commodities and other currencies the price of oil follows suit.
Supply and demand are all that matter. Well that, and artificial restrictions on supply from an uncompetitive market. If the value of the money changes, the value of everything else does as well, including wages. So it's really not an effect of energy costs.
Except the supply of oil is high relative to demand currently yet we're poised to eclipse 100% gain from the lows. At the same time we've seen the dollar's value to other currencies and commodities diminish. And the value of everything else is changing but not necessarily at the same rate or same amount. I don't see where I claimed that other exchange rates remain static to the dollar, but oil changes.
And it's doing worse in comparison to other currencies since the low in the price of oil. In just the past few days the Euro has passed the Dollar in since the 24th of December. The announcement about America's debt rating would qualify as projecting it to do worse.
If we're not to open a new thread for every month any longer, we could at least rename this one. 
Niall Ferguson believes Ireland, Belgium, Italy, and the UK will go bust in this crisis --> http://www.independent.co.uk/news/w...o-bust-claims-economic-historian-1692673.html
Niall Ferguson believes Ireland, Belgium, Italy, and the UK will go bust in this crisis --> http://www.independent.co.uk/news/w...o-bust-claims-economic-historian-1692673.html
Bamspeedy
CheeseBob
I don't know much about bank ratings, but I do know there is a AAA rating, so I imagine many banks would rather have a AAA rating than a AA. I would like to see a recent listing of which banks are AAA/AA. I tried going to the Moody's website, but it appears I need to register (no thanks).
Note: I am kind of skeptical of the bank ratings. Didn't Citigroup or some other company that just needed a big bailout have a AAA rating until the day the bailout was requested/ordered?
The ratings Agencies are always a day late and a dollar short. The reason banks want higher ratings is that many decisions are made based on that such as where pensions can invest their money, the rate they can get on their bond issues, etc etc.
Rabobank is AAA rated and private. They also sponsored the winner of the Giro d'Italia.
