My latest from BlownMortgage:
The markets continue to stagger around like drunks after last call and with every bit as much connection to reality. As I write this, a half hour before the final bell, the Dow is up 11%, nearly 900 points for the day. The NASDAQ and S&P 500 are both up around 10%. All this despite reports of consumer confidence and home prices dropping faster than President Bush’s approval ratings.
Wall Street’s Queens of Denial were apparently responding to talk that the Fed will cut the prime rate by at least half a percent. This is just one more measure of how the markets are now a faith-based initiative. It doesn’t matter how low the rate is when there is no money to borrow. The system is still facing a liquidity crisis and even if it wasn’t we’d still be tanking. For better and mostly for worse consumers still drive the economy. Those of them fortunate enough not to be losing their houses are losing equity at an astounding clip. …
Actually, the way the market shoots up from time to time scares me more than the drops. When it’s this volatile in both directions, I think it means nobody knows what anything is worth.