Rally on SEC Vote
By Barry Ritholtz - April 19th, 2010, 4:09PM
Sometimes, these things just line up perfectly:
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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
April 19th, 2010 at 5:08 pm
The vote was along party lines. The 3 Democratic Commissioners voting in favor of the suit, the 2 Republicans Commissioners voting against it.
I’m kind of surprised that the Republicans are still trying to protect the banksters. Well, I guess it’s not too surprising when you recall that they tried to put Sarah Palin within old man’s heartbeat away from the Presidency.
April 19th, 2010 at 5:28 pm
Yeah, as if that vote has any relevance anywhere other than some equity traders short-term dreams.
April 19th, 2010 at 5:32 pm
Why would a vote to sue cause the market to go up?
April 19th, 2010 at 5:33 pm
Republicans appear to be completely out of touch with ‘reality of SEC vs GS suit’ and the reaction of the Public so far! 41 GOP Senators sent a letter to stall the Fin reform on the very day SEC announced the suit and now this!
Are they that DENSE or am I missing some thing here?
April 19th, 2010 at 5:35 pm
I presume somebody somewhere is presuming that vote makes some implication re the strength of the suit when the vote really has more to do with politics than anything else.
April 19th, 2010 at 5:45 pm
@jojo
The vote (along political lines) implies that Republicans will not support hard financial reform. This would theoretically bolster bank earnings, which account for much of the recent rise in the S&P.
This would be bad politics for the Repubs. (almost laughable) GET BEHIND THE BAILOUT RECIPIENTS!!!!
This would be confusing to see the Tea Party rallying to support the criminals at Goldman. Funny
April 19th, 2010 at 5:52 pm
I wonder how much all of this has to do with air travel over Europe and not Goldman Sachs. Airspace started opening up at that time as well. On Friday us slowpokes in the US were just finding out that air travel had stopped in the old world for two days.
April 19th, 2010 at 5:59 pm
Fascism was very popular.
Communism was very popular.
Sometime you have to get behind PRINCIPLES over POPULARITY. Basic “rule of law”… rather than, “lets go after people with money, after the fact.”
The fact is, Goldman’s CDO business was smaller than almost everyone else — LEH, BSC, MER, DB, C, etc — what are you going to do? Call the “synthetic CDO” transaction illegal? Even when the banks and pension funds involved all WANTED TO BUY the product? And the basic losses were due to the housing bubble, not specific selections.
Its a classic witchhunt. Those repubs on the SEC committee deserve praise for sticking to some basic “caveat emptor” and market principles. Too bad the republicans did not stand up for lower spending on healthcare — just LOWER the govt coverage across everyone. Govt should cover BASIC healthcare. But no, the Repubs said, “Dems / Obama wants to ration your healthcare!” (Dont we all want more rationing?).
April 19th, 2010 at 6:13 pm
Cognos, traders don’t have principles. And they don’t care about popularity. Their only question: Does it make or lose me money, with a corollary for rogue traders, “if this is illegal, will I get caught”? That’s all that matters dude. It’s radical objectivity. It’s just understanding the numbers and where they are heading. You’ve said so yourself many times. I woulda thought you’da thought Friday woulda been a great time to load up on Goldman stock.
April 19th, 2010 at 6:26 pm
Looks to me as tho the news was leaked before 2:40
April 19th, 2010 at 6:42 pm
This has exactly ZERO to do with the vote. Another Mutual Fund Monday.
This is all about financial reform. When a major hedge fund gets indicted in the coming weeks just like the ‘bank’ GS, the financial services industry will understand either they are going to work with Washington to create Financial Reform, or they are going to have it legislated for them.
That said, the pullback from the overbought conditions is likely upon us. At least for the Financial Services industry who now has uncertainty in front of it. A rally like this was a good opp to take some off the table.
April 19th, 2010 at 7:29 pm
political yes, but the facts of the matter haven’t changed. this is just the continuation of the ramp up.
br
looking forward to the zh rebuttal concerning this weeks tax withholdings.
April 19th, 2010 at 8:43 pm
Don’t forget the longer view. Carbon cap-and-trade. The next big bubble.
No chance today given public sentiment against the WS whores.
GS cheats and junior gets a slight slap on the wrist. $15M? Chump change. Without it BSO’s cred is less than zero. GS is a great target as opposed to Buffet and GenRe and all the others.
BSO takes the high ground. Reps take their lumps. Pass a watered down reform bill.
Now they all have November sound bites.
And the cap-and-trade energy bill is back on the table after November.
And that’s when the WS crud get to really really pick us clean. 10xEnron.
April 19th, 2010 at 9:12 pm
really?
mondays have been THE day during this rally.
and, the dems still have a majority………
how anyone can say the GS was NOT politically timed for the upcoming legislative battle probably just got done watching dances with the stars……….
C’mon barry………….you’re doing a disservice to FusionIQ with this particular post….
April 19th, 2010 at 9:26 pm
First of all, the y-axis is so small on this graph that it’s very misleading. It’s ridiculous to think that a change of 10 points is a rally and not just noise.
But most of all, your “news hits” circle is in the wrong spot. The news hit the wire at 14:34, much farther up the graph than indicated.
I agree with @cheese – this is an embarrassing post for someone who typically has profound insight on market fundamentals.
April 19th, 2010 at 9:34 pm
Fraud is popular, too, with some people.
April 19th, 2010 at 9:53 pm
jojo actually this is related to a standard stock movement price reversal commonly called “buy the rumor sell the news”
It has something to do with crowd psychology. I don’t know if anyone knows exactly why stocks move like this we just know they do. It has something to do with all the short positions due to the SEC expected announcement coming before the actual news itself and then once the news hits, shorts begin cashing out and the boosts the price. At least that’s the theory.
April 19th, 2010 at 10:36 pm
And in their zeal, everyone forgot about China…
April 19th, 2010 at 11:33 pm
And that’s probably why they did healthcare first.
Timing is everything.