One of the things I noticed today (more on listservs than the open blogosphere) is a genuine petulance and disgruntlement over the fact that Wall Street responded to Geithner’s Plan by boosting its own value by seven percent. It was taken as a sure sign that the plan was bad or evil that investors liked it. A lot of people complained that it is stupid to judge a plan by how it is received in the markets on the day of announcement. That’s undoubtedly true, although that didn’t stop people from blasting Geithner when his first effort to introduce a toxic assets plan was greeted by a stock-market plunge.
Just by way of an aside, if you have $20,000 dollars stocked away in a mutual fund that is pegged to the Standard & Poor 500, you made $1,400 today. That’s the equivalent of the annual income tax on your first $21,000 of earnings.
I don’t think it matters a whole lot either way how Wall Street responds to a proposal. You might take comfort that Wall Street has confidence in the proposal or you might take it as evidence that the plan will only serve their interests and not the rest of America’s interests.
I just find it interesting that Left Blogistan is so defensive and upset that the market liked the plan.
Then Boo … you’ll just love this:
http://www.talkingpointsmemo.com/archives/2009/03/must_read_4.php
I do love it.
First, the premise of the whole thing is that up until last week the Obama administration had a dim view of Wall Street. You’d be hard-pressed to find Josh Marshall agreeing with that assessment. Wouldn’t you?
But let’s accept it. What is the evidence that the Obama administration has suddenly buckled?
Is it this:
Or is it this:
The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a plan to overhaul financial regulation, the New York Times reported.
Obama is expected to announce the plan, which officials said would include a broad new role for the Fed to oversee large companies, ahead of the G-20 summit in early April.
I’ll wait to see what actually happens first. And if the markets drop 500 points on the plan he puts out, what are you gonna say?
I’m not making that argument, am I?
I’d expect Wall Street to react negatively to a lot of good policy so I don’t get excited when they act positively.
But a 7% pop(meaning today)? As more astute commenters(like Barry Ritholtz at his blog) have said, moves like that aren’t the sign of healthy markets. … I guess my overarching point is .. and excuse my language .. but when are we gonna stop being Wall Street’s bitches? .. because they have us by the short hairs
I don’t see how anybody could claim the market these days is “healthy.” But if its recent downward trend has caused it to be undervalued, and if Obama’s policies have instilled a little confidence, it’s not surprising to see a move the other way taking the form of a big pop.
Let me just say that we will never stop being the bitches of people who have billions of dollars to play with. All we can do is restrict their ability to screw things up.
Boo, you write:
“I just find it interesting that Left Blogistan is so defensive and upset that the market liked the plan.”
Do you really, or were you being ironic?
I, myself, find it depressingly predictable.
Especially after Steven D.’s front-page diary on hope, here, today.
I liked Steven’s article.
Tell me why.
I found it to be eloquent and inspiring in its oratory, but false and simplistic, in an overly familiar way, in its contrast between the (as he depicted it) miserable, spiritually-bereft, slavering, money-hungering traders (who, of course, have no families, no children, no obligations of their own, no concerns other than to pile up money for themselves on top of the massive piles they have already accumulated, lost, and are now trying to re-accuulate) and the (of course) honest, good-hearted, hard-working, struggling “real” people who are just trying to make ends meet.
What did I miss, the missing of which made me think of the post as exemplifying “us vs. them” thinking?
Steven’s diary notwithstanding, I still find the response to today’s market reaction to Geithner’s announcement depressingly predictable, and am curious why you find it interesting.
what’s depressing about about making a 7% return in a single day? What I find interesting is that so many of my comrades feel defensive about it.
it’s because they are believers in celebrity-spectacle politics as media product and don’t have any historical perspective at all but have a “leftism” that is mainly composed of inchoate anger.
Well, said, rootless. If you guys have a chance to see charlie rose tonight, don’s miss it. Must see.
You seem to be reacting to “depressing” and “interesting” as keywords, without actually attending to the questions in which they were embedded. When that happens, it’s time for both (pseudo-)interlocutors — for no actual conversation can happen at that point — to go to be. ‘Night.
I’m slowly learning to not call myself a “leftist” or “progressive” since I am interested in practical political results, don’t see Politico as determinative, and care about labor unions and other boring stuff.
Whoo Hoo!
Happy Days are here again!
Dow 36,000 here we come!
</snark>
A little perspective Booman:
A rigged game with almost all up side and basically no down. If you’re on Wall Street, what’s not to like?
BTW:
1/14 down = 7%.
7% = the amount the market bounced today.
Do the math.
‘…if you have $20,000 dollars stocked away in a mutual fund that is pegged to the Standard & Poor 500, you made $1,400 today.’
If you don’t have it in your hand, you haven’t made it. Isn’t this what the whole financial mess is about?
BooMan, with all due respect, if I had $20,000 in a mutual fund indexed to the S&P 500 I wouldn’t be celebrating if I made $1,400 today.
I’d be fucking pissed off that the same fund was worth roughly $40,000 nine months ago when the S&P 500 was at 1,400, not 800.
Yup.
I suspect you’d be both.
What sloppy sex is to Right Blogistan, dirty financial fun is to Left Blogistan.
At this point, I don’t care about the plan. I’ve lost all concept of what it is, what it does, and what happens if it works or not.