Stock Market predicts economic de-stimulus

So while the Obama administration promotes their so-called stimulus plan and continuing with the Bush administration's bank bailout agenda, the stock market is predicting opposite results:

The Dow Jones Industrial Average dropped nearly 400 points today, closing below 8,000 in a sharp rebuke of Obama administration economics.

The market dropped nearly 200 points while Treasury Secretary Timothy Geithner presented on live television the administration's revamped bank rescue plan.

The Dow dropped further on news that the Senate passed the president's massive $838 billion deficit-spending economic stimulus plan in a 61 to 37 vote that included only three Republicans, Sen. Arlen Specter of Pennsylvania, and Sens. Olympia Snowe and Susan Collins of Maine.

Investors expected Geithner to explain how the second $350 billion in congressionally approved TARP funds would be spent.

Instead, Geithner suggested the Federal Reserve and Treasury were considering making trillions available to handle the financial crisis, without clearly specifying where the money would come from.

Investors appeared to react negatively at the vagueness of Geithner's plans, as well as his disclosure that the Federal Reserve and Treasury were planning to use as much as $1.5 trillion more, either to bail out troubled banks with more cash infusions or to buy toxic assets from the portfolios of troubled financial institutions.

Geithner also suggested Treasury would create another separate $500 billion fund to buy up toxic financial institution assets in a "good bank/bad bank" structure, while opening up another $1 trillion to reopen credit markets for consumers, including auto buyers, students, small businesses and commercial loans.

Throughout the trading day, rumors circulated that the Obama administration was creating Federal Reserve and Treasury obligations that could total as much as $9 trillion to resolve the toxic asset problem with banks and brokerage firms.

Comments

[Bud]

Yep, these folks do not inspire any confidence. Mostly cause they don't know what they are doing.