Shocker on Wall Street
The failure of the bailout bill struck wall street hard today as the Dow dropped 777 points to close at 10365. Everyone was expecting that the bailout would pass, even up until the wee hours of the morning the bailout was expected to pass the house with flying colors and make its way to the White House for a guaranteed signature from president Bush.
At some point last night, either in the dreams of lawmakers or from the phones ringing off the hook at congressional offices, the tide quickly turned to a defeat. Many house leaders are up for reelection within just 5 weeks. Voting for this monumental bailout would cost many people their house seats. Voters are taking a keen look at this issue and voting against Wall Street and for the value of their dollar.
Without a doubt the next bailout bill will be ready to go within a week. Or as politics go it will be added within the depths of some other unrelated bill, likely attached to disaster relief or another no polarizing issue that will guarantee a passage. Giving Congress time to think the bailout through will only result in a much larger bailout package as the two parties will barter with each other to force their key issues. Republicans will want more for the war and Democrats more for social programs, nonetheless Wall Street will eventually get its welfare.
Until the passage of another bailout bill, let Wall Street go. This is no market to be long 99% of stocks. The 1% that make the buy list should be carefully considered and well thought out as the general market direction is likely to be to the south. With so much selling pressure in a bad market you’ll be fighting an uphill battle just to break even. Without a bailout I foresee a Dow back to its tech-bust valuations and with a bailout a very minimal move to the upside. Unless you’re holding short, you shouldn’t be in this market.
Don’t know about 99%, but one should start buying now (slowly of cause)… Unless history does not repeat itself, it is a go time even if it continues to drop for some time… or it is another topic for these playing with Behavioral Finance.
Clean Energy is undoubtedly primed to make a huge rally in the near future. It is a company who is little affected (other than the share price) by the current market turmoil. It will continue to acquire assets and contracts and hide like a snake in the weeds until the economy is ready to make a surge. At that time, it will have a chokehold on the market of Natural Gas vehicles which will surely be the future of our automakers. Look for the share price to surge exponentially as the economy gets back on its feet!