I intimated yesterday that the Dow’s near 800 point drop yesterday was just Wall Street giving America a proverbial bloody nose for not making that bailout plan happen, and the market would likely recover today. And that it did. After a drop like that, there were just too many bargains to pass up. The result was a substantial recovery.
Do you think these hedge fund managers would actually kill themselves? They hold blocks of securities large enough to make the market move like it has in the past few days. No, it’s not a perfect science, and they probably wished they had brought it all the way back, but today was pretty good.
It’s just speculation on my part, but I wonder if these lending institutions, who were essentially bullied into giving these sub-prime loans to people who couldn’t possibly pay, are holding the government responsible, and feel entitled to that bailout, hence the violent murmer of protest after the bill failed to pass yesterday. Maybe it was a “you ‘aint seen nothin'” message to Congress. They may have a case, however weak. They should share culpability in this disaster, but should and would are two different things.
I heard a Bush speech from several years ago, where he rambled about how someone just here form Peru was going to buy a house. The premise was just looney. Can’t speak english, the mortgage contract “has alot of words”, and other assorted babble. But King George was advocating home ownership for Mr. Peru, whether he could pay for it or not. Why is another blog, but how would they do something like this? One of the ways was to recruit and fund a criminal enterprise like ACORN to strong arm lenders and rustle up unqualified borrowers. It’s infinitely more complicated than that, but Republicans and Democrats alike were in on this mess. Mix in the Wall “I’ll just sell these notes to Fannie Mae” Street, and we have what we have today.