Nothing left to say about this, PW. You covered it all, so true.

Only thing I can think of – can you get an email or call to Shuster and/or Rachel? (notice how Rachel has become one name only, like Cher or Bono). Nobody else is likely to point it out.

I’ve noticed that my local grocery store has dropped prices again, and Target had very good prices last time I went. That tells me that the economy is still showing evidence of major suckage. Why do I continue to hear so much happy talk about the economy?

So where are the Democrats they should be on the news making these connections? Heck if NBC ever wants another interview with the White House then CNBC should give Rahm some time to do the Snoopy Dance!
Business types are Rahm’s people so I think he should be the one to go him, Summers and Geithner they should all be saying told you so and we were right. ( I still think they could have done a better job though by going more LEFT)
Anyway they should all say that the Markets are dreaming of millions of Americans with healthcare spending more money on the economy now that drug prices will be going down.
They should all be saying just how much will worker productivity be boosted if the McDonalds cook making a few thousand burgers a shift goes to a doctor rather than cough on the food all day infecting every one who eats the food. I assume that many of the customers have jobs.

I am feeling more positive about the public option especially after I read about some of the needs it will meet.
Here’s a rural america point of view on it:

http://files.cfra.org/pdf/public_plan.pdf

This is the worst sort on analysis. Attributing some event causal status in market movement. Inevitably the causal event supports some particular prejudice.

The Cramer’s and Kudlow’s of the world were prevented from total psychic collapse back in February only because they could blame it on Obama. Just as Obama is banished from their search for the cause of this up cycle.

The up cycle in stocks is a roadblock to fundamental political and economic change.

Stocks are a leading indicator of the economy people in the know buy stocks if they think their company is going to grow and go up in price. Unemployment and Consumer spending are lagging indicators after companies grow and hire more people it takes as a general rule 6 months for any change good or bad to be felt in the economy.

Well, I hope things are getting better, but I just don’t see it.

The up cycle in stocks is a roadblock to fundamental political and economic change.

Only if Obama does not get his people out there to take credit its been about 6 months since Obama took office his change was not as big as we wanted but it seems big enough to maybe get things moving.
The DOW got how low this year Obama took the grief Rush called it the Obama recession. So now Obama gets the Cred.

From now 6 months unless Geithner lied about the shape the banks are in or the Credit Default Swap market tanks. I’ll say latest it will be is March before we get good news.

Please don’t fall into the trap that the DJIA equals the state of the economy. Does an economy exists to serve the people of the country or were citizens invented to serve an economy? The real measure of the economy’s health is the employment rate: how well it serves the populace.

I hear what the DJIA or NASDAQ did every day, even with updates every hour. What is that supposed to tell me? How am I supposed to use that information?

Let’s hear the employment/unemployment rate every day, too, instead of once a week for jobless claims. Or, report the market averages once a week, and stop the obsession of arbitrage.

Even on Google when I type in ‘healthcare reform’, I get the Big Mouth media articles clogging up the pages. When I found the article on Rural America and its need for a public option, it was refreshing. It is the self-employed types, or small business employers and employees in rural and lower income areas that really could benefit from a public option. To make more generalizations; it is the low income, above Medicaid, below 80 to 100K a year families who are really squeezed to pay for any kind of health insurance. For someone who works for themselves, it is a fortune to try and buy into a plan and there are so many who have pre-existing conditions and who cannot even get into a plan. Some folks on the bottom are afraid to earn too much to where they’d lose their Medicaid. Now that is a crazy way to live. Check this out. I will put the link up again:
http://files.cfra.org/pdf/public_plan.pdf

I assume that Rush will soon be on the air saying we should thank George Bush for saving us.

See my 6 and 9 I agree we regular people are still in trouble but like a tired swimmer about to drown I see hope because I see land now. Yes things can get worse again Banks or Credit Default Swaps can still blow up maybe something unexpected can happen but yes I can see land.

the Dow is 30 stocks. Alcoa, CAT, 3M, IBM, and Exxon are a large part of the rise in the Dow today. Walmart, Boeing and McDonalds are down on the day. Cat in particular has been having a good week, increasing guidance and beating earning estimates. This could be stimulus related infrastructure speculation, not health care.

It would be nice to get the increase broken down according the the weighting of each component, I suspect that IBM’s 1.29% rise is magnified by its market cap. IBM might benefit from the health care reform. And I get that you’re arguing that we’ll see broad increases in earnings for non pharma/insurance companies if reform passes.

I agree the DOW isn’t a good proxy for the economy in general. The S&P 500 is a bit better… it is showing an even greater increase – up 2.3%
Looking at the first 100 companies shows pretty strong rallies across the board (only 12 companies are down in the first 100).

Rural States = Red States we should have sold this plan more to them:)

Uh the big companies give their top employees healthcare now if the plan Obama signs cuts drug costs just how much will they all save is the question WallStreet should be asking?
Right now our healthcare costs are higher but we don’t cover everyone and those costs have been rising the big companies know this and have budgeted for the expected increase.
That money budgeted for the expected yearly increase in Healthcare costs should now be freed up. The money budgeted for drug costs higher than what Canada pays should be freed up.
All the corporations that provide healthcare to some or all their workers just found free money. How much money is freed up is the question?

Hi TCU. Don’t all of the states have low income and poor families?

The market went up because Obama let the health sector off the hook.

The “insurance exchange” is a canard, a figment, less than a panacea, and will do nothing.

How much money is freed up is the question?

I Don’t expect Cramer to point this out but I do expect Obama to have people pointing this out If we pass Health Care the Market will go up because of this free money which was unexpected.
Its the unexpected changes good and bad which really move markets once they are believed in. The Terror premium on oil that raised the price of oil during the Bush years beyond rational market fundamentals is an example of Bad Change that was believed in.

True but the Red states have more Rural Areas and I would have liked to get some of their votes on this if we could.

Yes. Agreed. No one seems to know much about the public option that I talk to, other than you folks. I have to go now. Good talking to ya.

Are insurance stocks going up? What about drugmakers? Healthcare providers etc? If all 3 are going up then yes be worried 2 out of three still bad. Just the insurance companies ok worry.

Good Talk:)

The DOW is actually validating Harry Reid’s courageous decision to recess the Senate without actually doing anything about health care.

right, big companies should have lower expenses – which means higher earnings.

Here’s a good view of the overall market. health insurance companies are up.

I hope you are wrong Teddy.

Over half million people filed for unemployment last week. The Dow jumps 188 points on the day of the announcement. Fewer jobs = increased surplus value (profit) = higher earnings statements. It’s not rocket science.

Is this thread entirely irony-free?

the market has been reacting to the second derivative of the jobs number – the initial claims numbers were up in the 700,000 range a couple of months ago. Just last month a number in the 600,000 range was cause for celebration. So “half a million” is cause for exuberance on wall street. Now if you’re one of the half a million, not so much.

Uh the insurance companies don’t cover folks with preexisting conditions right is Obama going to let the insurance companies dump as many of their sickest on the public plan as they can before we all get healthcare?
Because then I could see insurance companies going up? Just throwing out a theory.

Sheesh! snark tag I was wondering what I was missing!

I think that recission (sp?, dumping people for being sick) is supposed to be prohibited under new rules.

Fewer jobs means less workers as a cost it assumes that those workers were not earning enough to justify their pay in this economy.
So yes less cost maybe some profit. But it also means less expected revenue as you have less workers. It also means you might keep on getting smaller like GM did.
I am not saying your wrong the Market does act under that kind of logic. I just think that logic is short sighted.

Good!

The stock market has nothing to do with the economy. I know most people think this is like saying the sun rises in the west. The stock market does tend to move for the same reason the economy does. That is on increases or decreases in money and credit. (which are closely intertwined)

So far thorough the stupendous increases in Fed and world Central Banks balance sheet expansions, money creation, and government borrowing the stock market has the liquidity available to rise. There has been very little of that money and credit go into the real transaction economy. Stay tuned.

The market is short sighted, focused on short term gains/profits. I don’t doubt that some corporations are using the recession as an excuse to trim the workforce. The market goes down, speculators buy, hoping for a profit in the short term. When one buys a million shares and they go up a dime that’s a tidy profit in a week or less.

Timing the market thats true but dangerous.

“Of course, none of the financial analysts are making that connection”

Of course not, they probably don’t want to be called retarded.

Correlation does not equal causation. I’ve seen right wing pundits say his performance was so bad (it was even criticized by the NYT) that universal health care probably won’t happen now, and that’s why the DOW is up.

It probably had more to do with Ford Motor Co. releasing second quarter profits of 2.3 billion and Hershey and Phillip Morris International Inc releasing forecasts higher than expected.

When you only follow politics it can scew your analysis of things you don’t know well, like the DJIA. Makes you look kind of stupid IMO.

The Dow is complex, a mix of psychology (psychosis), superstition, art, and science. It’s a bit like playing poker with millions of other investors, some of whom are merely trying to win enough to pay for their rooms for the night…others trying to win the whole game.

And whether you want to play THAT game, depends on how well people feel about their possibilities in winning OTHER games..and how much money they have to invest. Clearly an increasing DOW suggests that there is, somehow, still money to be invested in the economy. Someone has money to spend (where did this $$$ come from, and who is investing it? Could it be that this is the result of the tougher enforcement of off-shore investment accounts? The bank bailouts? ). As well, those investors need to put that money somewhere, and the other options aren’t looking as lucrative. That might mean that those other options are really, really bleak. Resolving the health care issue would help many companies in an area of major cost for them, on the other hand many of the DJIA industries ARE involved in Insurance, Pharma, Hospitals, etc. Are those losing value?

Nevertheless, providing this isn’t a “bubble”, it’s good for those people who live on their 40lK’s, pension plans, and many public agencies that invested heavily in the market before the Bush crash.

Not to cast a pall over the proceedings, but I recall all the major economists predicting a boost in the numbers until the end of summer, then another crash.

Check out the upcoming Treasury sales:

70 day CMBs, $30 billion (tomorrow)
13 week Bills, $32 billion (July 27th)
26 week Bills, $31 billion (July 27th)
52 week Bills, $27 billion (July 28th)
2 year Notes, $42 billion (July 28th)
5 year Notes, $39 billion (July 29th)
7 year Notes, $28 billion (July 30th)
19 year, 6 month TIPS (reopened), $6 billion (July 27th)

Two hundred thirty-five billion dollars in a single week?

That’s 12 trillion bucks of debt in a year…..who’s gonna be buying all of it and what does it tell you about the flaming bag of poo that the Bushies left on our doorstep??

I wouldn’t get so focused on the market…it’s likely to have a big drop tomorrow because of the amount it’s risen and bad earnings from Microsoft, Amazon and AMEX.

It’s just going up too fast at the moment.

Don’t hitch Obama’s wagon to that falling star

Claim credit for Obama for the DOW rising a bit today, and he’ll have to accept responsibility when it plunges later.

Our markets have only guaranteed themselves bigger eventual plunges by successfully avoiding accountability to date. They have so far managed to privatize the profit and socialize the risk, but that can’t continue indefinitely. Even if they could get the taxpayer to play their fools forever, they have already run up losses in excess of what the taxpayer will ever be able to repay, and certainly will never be able to repay when the added burdens of the future bailouts that not facing the music now will let them continue to generate until they are stopped. Our international creditors will not prove so endlessly foregiving, and they will eventually end the hayride. Our markets, based as they are on confidence, will evaporate in the bonfire of that confidence.

While Obama will bear legitimately share some of the responsibility for that day, because he is enabling and facilitating the banksters, it is not mostly his fault. Let’s not tie his reputation to the valuations of fundamentally fraudulent markets.

Unfortunately a lot of what we are seeing is the result of the US dollar doing a swan dive. We’ve been printing far too much money and it is starting to catch up with us. I think we’ll see the dollar index drop to 70 or maybe lower before it’s all over. Gold should soar as well.