Posts filed under “Bailouts”

“Each crisis has been followed by a bigger crisis…”

On Monday, we looked at Weekend Bailouts and Subsequent Market Reactions. CitiFX took a closer look at the data, and they confirm our prior position: Namely, that "Support levels were eventually breached and the market trended lower."

CitiFX Technicals adds:

As the market falls aggressively, we find that there are further developments from authorities that act as ST supports for the Dow. But the real concern is that each crisis has been followed by a bigger crisis and this just does not feel like the “capitulation blow out”

Here’s their chart, along with comments:

Dow_bailouts

1. August 17, 2007: The Federal Reserve Board announced a reduction in the primary credit discount rate from 6.25% to 5.75%. DJIA rallies 1,680 points over 9 weeks

2. November 26, 2007: Significant changes in limits for SOMA securities lending programme (federal reserve banks of NY). DJIA rallies 1,056 points over 3 weeks

3. January 22, 2008: FOMC decided to lower its target for the federal funds rate 75 b.p.s in an unscheduled meeting. DJIA rallies 1,134 points over 2 weeks

4. March 17/18, 2008:Bear stearns takeover on 17th March and FOMC decided to lower its target for the federal funds rate 75 b.p.s. Market expected 100 b.p.s. DJIA rallies 1,400 points over 8 weeks

5. July 15, 2008: Paulson’s testimony before Senate Banking Committee outlining plan to support GS’S (liquidity, sufficient capital and Fed consultative role). DJIA rallies 1,039 points over 9 weeks

6. September 08, 2008 Treasury takes control of Fannie and Freddie.

Source:
Welcome to the U.S.S.R. (United States Socialist Republic)  Citigroup  (PDF)
Tom Fitzpatrick, Shyam Devani
CitiFX® Technicals – Bulletin
08 September 2008

Category: Bailouts, Federal Reserve, Markets, Technical Analysis, Trading

“Each crisis has been followed by a bigger crisis…”

Category: Bailouts, Federal Reserve, Markets, Technical Analysis, Trading

“Each crisis has been followed by a bigger crisis…”

Category: Bailouts, Federal Reserve, Markets, Technical Analysis, Trading

Nice discussion via Charlie Rose: Floyd Norris, Mohamed El-Erian, Gretchen Morgenson, Nouriel Roubini discuss the world’s biggest bailout: Fanny Mae and Freddie Mac

 

Hat tip, Paul!

Category: Bailouts, Credit, Video

GSE Honeymoon Is Over

Category: Bailouts, Credit

Gross on PIMCO’s Fannie Trade

Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., talks with Bloomberg’s Tom Keene and Pimm Fox about the impact of the U.S. government’s takeover of Fannie Mae and Freddie Mac on Pimco’s business and mortgage debt, and the outlook for Federal Reserve monetary policy.

click for video

Gross

00:01 Impact of Fannie, Freddie takeover on Pimco
02:18 Effect on housing market; foreign investors
04:24 Reasons behind takeover; Fed monetary policy
06:18 Outlook for U.S. mortgage market
Running time 07:36

Last Updated: September 7, 2008 21:21 EDT

Category: Bailouts, Video

Gross on PIMCO’s Fannie Trade

Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., talks with Bloomberg’s Tom Keene and Pimm Fox about the impact of the U.S. government’s takeover of Fannie Mae and Freddie Mac on Pimco’s business and mortgage debt, and the outlook for Federal Reserve monetary policy.

click for video

Gross

00:01 Impact of Fannie, Freddie takeover on Pimco
02:18 Effect on housing market; foreign investors
04:24 Reasons behind takeover; Fed monetary policy
06:18 Outlook for U.S. mortgage market
Running time 07:36

Last Updated: September 7, 2008 21:21 EDT

Category: Bailouts, Video

Gross on PIMCO’s Fannie Trade

Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., talks with Bloomberg’s Tom Keene and Pimm Fox about the impact of the U.S. government’s takeover of Fannie Mae and Freddie Mac on Pimco’s business and mortgage debt, and the outlook for Federal Reserve monetary policy.

click for video

Gross

00:01 Impact of Fannie, Freddie takeover on Pimco
02:18 Effect on housing market; foreign investors
04:24 Reasons behind takeover; Fed monetary policy
06:18 Outlook for U.S. mortgage market
Running time 07:36

Last Updated: September 7, 2008 21:21 EDT

Category: Bailouts, Video

Fannie versus Freddie

Category: Bailouts

NPR Radio on Fannie, Freddie

Category: Bailouts, Media, Real Estate