Wall Street Stock Markets: Give us a financial help to over credit crisis. If Wall Street wanted to keep the pressure on world leaders for another huge government-led bailout of the global financial system, maybe the rally in the final hour today wasn’t the right strategy.

Nonetheless, hope for a rescue that will finally turn the tide helped pull stocks up sharply from their lows. Some market sectors even scored significant gains for the day — although they barely made a dent in the week’s losses.

The Dow Jones industrials finished off 128 points, or 1.5%, at 8,451.19, after being down as much as 695 points, or 8.1%, at the start of trading.

So we were on our way to Black Friday — for about six minutes. That was followed by a rally that briefly lifted the Dow into positive territory (up about 90 points), then another sell-off, then a major rally in the final hour, then another pullback.

Just another day of insane volatility, except this one was even more insane than usual: The Dow’s intraday swing spanned 1,006 points from its low to its high — the first time that has ever happened.

 For the week, the Dow lost 18.2%, the biggest percentage drop in the index’s 112-year history. The New York Stock Exchange composite plunged 19.5%.

“It’s got to end somewhere,” said Michael Mainwald, head of trading at Lek Securities in New York.

But whether this was it — with the Dow, at its low for the day, off 44.3% from its record high one year ago this week — only the market knows for sure. And it isn’t giving many clues.

A rally in bank stocks set the tone for the day’s recovery, traders said: Everybody was expecting the Group of 7 industrialized nations this weekend to put forth some new package of fixes for global credit markets, which remain largely frozen.

Banks could be the major beneficiaries of any new moves. Treasury Secretary Henry M. Paulson said after trading ended today that the U.S. would move ahead with a plan to inject capital directly into banks and other financial institutions, taking non-voting shares in return. This would be part of the $700-billion bailout Congress approved last week.

In regular trading, JPMorgan Chase & Co. jumped $4.96 to $41.64; Citigroup rose $1.18 to $14.11.

Awaiting concrete action by policymakers, financial institutions and other investors continued to hoard cash early today. The annualized yield on three-month Treasury bills sank to 0.19% from 0.52% on Thursday as buyers swarmed.

Many analysts believe that G-7 finance chiefs have gotten the message, after the mammoth losses in stock markets worldwide this week. Yet the statement policymakers put out this afternoon was filled with generalities. Markets will want something more specific — or else.

“The G-7 has to come up with some really new and profound ideas for lubricating the world’s banking system and restoring the flow of credit to the private sector,” said Carl Weinberg, chief economist at High Frequency Economics in Valhalla, N.Y.

“Otherwise, the ensuing liquidity trap will lock up the world economy and throw us into a recession within a matter of days and weeks, not months and years.”

See economist Nouriel Roubini’s proposals for massive government intervention in this earlier post.

The following are just comments. Please leave your views afterwards:

It is interesting to note what the financial powers that be are willing to acknowledge and what they seem to be unable to disclose. There is a crisis in the credit market, made quite visible mostly by the way the equity market is imploding.

Businesses that do not retain earnings to fund future operations rely on new lending all the time (not particularly wise), but are not able to sell commercial paper. Home buyers with the best credit rating are not granted decent-rate mortgages. What has happened? Why are investors dumping bank stocks? Why are people buying gold and silver? People don’t know whether to put their money under the mattress or spend it as fast as it comes in. Does this mean that bankers are becoming wiser and ordinary people becoming more stupid?

No. This means that reputations, or the credibility of the borrowers of the world are in question, and that the fiat currencies are failing. Our money, after all is based on debt. Moreover, the consequences of this leads to a contradictory mix of communications.

What is being disclosed is that it is a bit more difficult to get a loan. Interest rates “suggested” by central banks are being lowered at the very time that actual rates for new loans can hardly be discussed (if you must ask, you cannot afford it). What are we not told?

Among the things that the financial powers seem unable to disclose are the true consumer price index (CPI: is it the mere official 5.9% or the over 14%, to which the growth of the money supply leads?), the true growth of the national debt or the current deficit, the fact that the income tax is a ruse to hide the true legalized theft of monetary debasement, the true GDP (now negative), the effect of past government regulations that caused the bubbles of the last two decades (CRA and Fair Lending).

The G7 is meeting with the ultimate monetary questions of the table. Now no one is safe. You could wake up Monday morning with financial markets closed for days, with a new world currency, linked in some way to precious metals. If you own gold you may not benefit from this. Who knows what these self-designated geniuses will come up with?

We may now expect any of a variety of desperate measures to mask these government failures that are blamed on the market: massive creation of credit through the Federal Reserve, a new war, censorship, martial law, who knows. The banking-government complex insists on ultimate victory. I, my family and you all are just collateral damage.

We were not expecting to get out of this alive or to take it all with us anyway.
Let it burn, let it all burn! I live in a simple house which I can afford. I take what I can pay for and have no credit card debt. There is one for sale sign in my neighborhood. Drive one minute to the next neighborhood over, with homes in the $500,000 range. Why are their 10 times the amount of homes in foreclosure here? The answer is simple. People got greedy and simply bought too much house. These people CHOSE not to live within their means and now the government is going to wipe their tears away by reaching into my pocket. I meanwhile will keep making my payments with no help. That is what I get for making “smart decisions”. Perhaps I’ll go ahead an make some “bad choices” since following the rules apparently doesn’t pay off.

…”ripping off the poor and middle class to fund the wealthy”??

I am a volunteer tax prepreparer for low and moderate income earners - mostly minorities and seniors. They don’t pay any taxes, thanks to the Bush tax cuts, so it’s not their money that’s going to bail out our credit system. In fact, if they’re under 65, many of them get the Earned Income Credit, another form of government welfare, which BO wants to expand.

Wall Street goes up and down based on imagination and people make a living imagining what it all means. It’s all enough to let your imagination run wild.

$750 billion added to a $10 trillion national debt and the lala land politics that created it is good material for another Golden Compass type movie with Nicole Kidman. Imagine climbing a stack of dollar bills that reaches into space over three times the distance to the moon on your way to magic land.

The only problem is that, this time, imaginations have turned into madness. It’s time to pull the plug on this fantasy movie.

Four homes around me were sold to them whom could not afford them, I do hope they are lost, as they are being run down, that devalue my home, In a 2003 speech BUSH took full credit for the sale with no down payment of homes, i do not fell well about the bailout. it is like paying to have your home wrecked.

Any sane person would realize the markets crashed BECAUSE the bailout passed.

First, it was proposed and the markets went way down. Then the house nixed it and the markets went back up. Then the senate and house passed it and the markets collapsed.

Every sane investor realizes the only thing the government can do is damage, in the form of Paulson ensuring that his buddies at big investment firms are made whole at the expense of the rest of us. So the only sane things to do are sell everything you have right away, or bet on Paulson not being able to actually conduct the rescue due to political harassment.

This reasonable fear that the government is going to save the big institutions at the expense of the rest of us is greatly amplified by the very overt media invovlement in political lobbying to make the bailout happen, and to protect the big institutions that need to be liquidated for the market to recover.

The real way the media can help stabilize the markets is to go over Paulson, his associates, and what he proposes to do with a fine tooth comb so people have some confidence they understand what is going to happen and why. Without confidence based on actual knowledge the only rational presumption is a lot of the stocks I hold are worth zero, because the stocks Paulson’s buddies at Goldman Sachs bought are going to pumped up by government intervention.

What the markets are saying in response to all the “rescue” plans is that no matter how many hundreds of billions of dollars governments conjure out of thin air to give to the corporations that give them the biggest bribes — uh, campaign contributions — that money isn’t going to make it to shareholders, and the shareholders have figured that out. The “rescues” just add to the burden of the typical shareholder/taxpayer. They might reduce pain in the short term, but they increase it in the long term.

How about giving us a plan to become energy independent. Very little is being said about the link of our dependence on foreign oil and it’s exorbitant price and the rapid decline of our economy. The high cost of fuel drives up the cost of food and EVERY consumer product. Families are suffering tremendously from filling up the car to paying electric and heating bills to the rising cost of food. There is little to no money left over to save or invest. Jobs and homes are being lost at a record rate with no end in site. We need to utilize natural sources of energy such as wind and solar as well as integrate all modern technology such as hybrid cars, plug in cars, bio fuels etc. We have the technology and knowledge what our nation seems to lack is a plan of action. We are drowning in our dependence on foreign oil. We need to wake up, educate ourselves and be proactive in demanding our elected officials do everything in their power as leaders of our nation to extract us from the iron grip of our dependence on foreign oil. I just read a book called “The Manhattan Project of 2009″ by Jeff Wilson. I think maybe we should elect him for president! he is brilliant so is his book

The Federal Government is likely to own the banks, the domestic auto companies, some hedge funds, and who knows what else. So, in the future you better only pick investments which are likely to receive government guarantees or funds in a pinch. In China, those specific companies which are politically connected get all the long term contracts, amounting to billions and billions of dollars in business. The government allocates capital. This is our future, as well.

i think the best thing for governments to do is to initiate massive tax increases on those who are able to pay them. this will reduce the ‘crazy money’ out there and will take some of the speculation out of the market place, where greed has driven this market into what we’re seeing now.
with these tax revenues governments should invest in massive public works projects to revitalize nations’ infrastructures, education systems and health systems. this will keep people working and will inject money into circulation and from this a new economy will emerge.
then, governments should initiate policies to reduce market place speculation (such as imposing high taxes on investments sold before a defined time period and a minimal tax on all buys and sells).
next, governments should make a big effort to pay down debt, a real drag on all economies. those lately who have claimed the ‘fundamentals of the economy are strong’ were complete idiots: how can ‘fundamentals’ be strong when governments don’t make an effort to pay their debts.
I would argue that the current measures being taken by the Bush administration and the larger group of “finance ministers” from the G7, are demonstrating an underlying truth which would be impossible for any of them to admit: this melt-down is not a crisis of confidence in the US economy, it is a recognition by investors at large that the global financial industry, lead by the major firms on Wall Street, have constructed a rigged game, the rules of which limit the upside potential of all investors. On the downside, the rules are such that the operators of the game can speculate with the assets entrusted to them, and when their schemes go wrong, tacitly hold their governments hostage to the corrosive effects of near-term financial losses, and thereby effect bail-outs of many varieties in order to sustain the canard that the game itself is honest.

What should a President do about it? I believe he should consider an aggressive investigation into the individuals who perpetrated the sub-prime mortgage irregularities, and use whatever legal means available to expose their malfeasance, and recover assets they have acquried with the compensation they have extracted over the entire course of this loosely understood “racket” they have been operating. He should also draw upon expertise from those who are not part of the racket, but who understand how it works. Two good examples: David M. Walker, former Comptroller General of the GAO, and William Isaac, former head of the FDIC under Ronald Reagan.

The current crisis and the measures being taken give the appearance that Secretary Paulson is willing to spend an unlimited amount of money, as long as the solution protects the status quo in terms of who actually holds power on Wall Street, and their cohorts in Congress. The reason so many voters opposed the bailout was precisely because we wanted to see the manipulators and opportunists flushed out of the system. Until that happens, no one with any sense is going to rely upon Wall Street for anything. It’s clearly a rigged game, the sub-prime mortgage episode has left a massive e-paper trail which substantiates that.

The middle class is the heartbeat of this great nation. When the middle class can’t afford to buy a house, we have real problems. Home values are over inflated in Florida and they SHOULD come way down. I don’t think the houseing market is necessarily “crashing”. Nor do I think capitalism is broken. On the contrary I believe capitalism is working, driving the prices of homes BACK to where they should have been to begin with.

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