Geither Speaks Tomorrow, Bank Nationalization Coming Soon
We all remember what happens every time the Treasury Secretary opens his mouth. Both Paulson and Geither share one thing: the ability to make stock markets crash.
Obama’s stimulus package didn’t do anything to help the markets on Tuesday but a new plan will be rolled out tomorrow at noon. Investors will have to digest a new plan to help foreclosures and many people expect that this will be the release of the “bad bank” plan which is just a few simple words away from full on nationalization.
Investors have acted negatively on any government interference in the market. Investors hated TARP and sold off with the stimulus. A bad bank plan may grab people’s attention but the plan is flawed, just like TARP and just like every other bailout. The banks are broke, and transferring debt to the American citizen may buy an uptick but it won’t last for long.
Interestingly enough the dollar has been rallying on recent news even as precious metals are popping. Gold and silver have had an excellent run from their bottoms and silver’s break through $14 is more reason that traders are going to hate Geither’s plan. More and more bailouts are going to keep pushing precious metal prices higher.
The announcement tomorrow is of critical importance as the market is at both the November and 2003 lows. If the markets fail to hold 7500, its over, this market is set to crash if it falls through. All hope is that this old trendline has enough juice to keep the market in positive territory.
Thanks for the update. Yeah, the markets would actually run smoother if Paulson and Geitner would just lay low and quit talking. Funny how they could accomplish more by vacationing at a tropical island than they could by trying to do anything.
The market is tough right now, and investors still don’t have any trust in it. It’s hard to say whether the support levels will hold, but I would say that if they hold up this time, there’s a large chance they will still fail in the future. There is a lot of muck that has to be worked out and trust that has to be regained.
All this while Gold and Silver have broken out of their price bases. Now would be a good time to buy on dips and pullbacks.
Happy investing.