“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:


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.

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

Intervention Ain’t What It Used to Be

Category: Markets, Psychology, Taxes and Policy, Trading

Roubini on CNBC

Check out Nouriel on CNBC this morning — he is guest hosting, and makes so much sense it makes the rest of the guest list look almost silly.

My boy Chris Whalen also had a good spot, worth checking out.

Fannie, Freddie & Financials


The rescue
shouldn’t distract investors from the present peril of financials, says Chris
Walen, Institutional Risk Analytics co-founder/managing director

The Financial Development Report   


A look at
the World Economic Forum’s report with U.S. leading the rankings and UK second.
Details with Kevin Steinberg, World Economic Forum COO and Nouriel Roubini,

Category: Credit, Financial Press, Valuation, Video

GDP fails ‘commonsense sniff test’

Category: Data Analysis, Economy, Financial Press, Inflation

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

Wild Market Day: Open Thread!

Category: Markets

GSE Honeymoon Is Over

Category: Bailouts, Credit

Updated Fannie/Freddie Linkfest

Category: Financial Press

Columbia School of Journalism Sulzberger Program

Category: Financial Press, Weblogs

Lehman Goes Boom

Lehman broke $10 just now, down 40% for the day. > For laugh, check out Charlie Gaspario’s CNBC video at the time – simply inexcusable reporting by CNBC, cheerleading a CEO against credible critics of the firm: “Shorts are full of it, desperate . . . Maybe Dick Fuld is right and Einhorn and Ritholtz…Read More

Category: Corporate Management, Technical Analysis, Valuation