Dow soars more than 1,050 points, its biggest point gain in history

Thank heaven

For now

As everyone says, the economy’s fundamentals do not seem weak, so a precipitous drop doesn’t really make sense. I think the markets were just (and may still be) reacting to instability and uncertainty: Trump’s feud with the Fed, the Trump shutdown, etc. Investors seek stability. Once those areas of uncertainly are resolved, or at least smoothed over, the markets should be healthy.

I hope.

17 thoughts on “The Dow rebounds big

  1. I have no idea if the Great Depression could happen again. My point was that during the period of the stock market crash of 1929 (which took place from Labor Day 1929 to mid-November 1929) there were several days on which the stock market roses sharply, although it never exceeded the level it hit on Labor Day.

    Of the factors causing the Depression Galbraith mentions in his book, several have been rectified (the weak banking structure extant in 1929, and the almost complete lack of a social safety net) and others have recurred (the bad distribution of income, with too much concentrated in a small number of very, very wealthy).

  2. You folks really need to read J. K. Galbraith’s “The Great Crash: 1929”. This kind of thing happened several times during the period of the Crash.

    1. I don’t think the Great Depression would happen again. Central bankers understand a large amount of the mistakes previous central bankers made at that time. The biggest one was having a contractionary monetary policy in order to stay on the Gold Standard.

      1. FDR chose a middle path that made absolutely no sense of staying on the Gold Standard but setting it at $35 per ounce. The U.S did not go off the Gold Standard at that time.

  3. Nothing will be healthy as long as the insane ass-clown continues his mockery of the American presidency.

      1. Keep supporting those corporate and 1 percenter tax breaks, because they always seem to work out so well throughout history.

        Duh, obviously they just needed $7 billion instead of $5 billion to create all these jobs, they’re obviously not using them for stock buy backs or acquisitions to raise CEO compensation or anything.

        And don’t worry about that deficit, it only mattered when that damn Obama was making everyone eligible for health insurance. Idiot with his pre-existing condition liberal ideas – those people who are sick could just die instead. At least Trump’s deficit is going to the poor Koch brothers so they can buy another $10 million house to stimulate the economy!

      1. If you’re talking to me, I work in IT, have a Bachelor’s degree and working on the second and my Masters, and do more than well enough for myself with a position in a Fortune 100 company. Definitely not on welfare. I’m also white. And not a part of the Trump cult. Go figure, right? Weird that someone like me has the gall to think for himself, huh?

        The thing is, I’m not ignorant like Trump supporters who go around with anecdotal ignorance about welfare and immigrants and hope just turning the screws a little more with a wall or law and order, or whatever ignorant catchphrase of the month is will do anything. If rural Americans are pissed they lost their jobs, they have a funny way of expressing it – by sucking ass of the corporations that moved their position in the first place.

        Last I checked, if you mapped the wealth to this country in terms of geography, the top 1% would own every state except Texas. And the next 9% would own the state. Then the 90% would be the size of a city.

        You’re either ignorant enough to believe immigrants with nothing making noting are the problem, or welfare is the problem, or you use facts to understand the clear problem in this country. Hint: its not because you saw some black man using food stamps or some immigrant on FOX News. But it would take an education to understand that.

  4. They are reacting to the Democrats impending takeover of the House in a couple of weeks.

    1. That’s a ridiculous assertion and without merit. The markets reacted to a variety of factors over the last several weeks including the Facebook privacy story, the Fed rate hike, Trump’s tariffs, Trump’s attack on the Fed Chair, Trump’s bizarre and confusing tweet about an agreement with Xi, Mnuchin’s brilliant public statement about bank liquidity and slowing economies in Europe and Asia.

      1. I think there’s probably a kernel of truth in what he’s saying, in that nobody is quite sure what to expect from the new Democratic House, and nobody is sure in what kinds of crazy ways Trump will react to what is assumed to be constant provocation from House committees. I think investors have to assume a cautious pose, in that as Trump gets cornered, he’s likely to become ever more unstable. Of course, that’s not a large role in the drama of uncertainty that is currently playing on the investment stage, and it is not a role with an immediate impact on the day-to-day fluctuations we see at the present moment, but it is a role. It’s just that it’s the Stan Lee role in the great Avengers movie of life, and W. Stanley thinks it’s the Robert Downey Jr. role.

        1. That’s probably an apt analogy, Scoop. In that spirit I amend my original comment to ‘mostly ridiculous’ and ‘almost entirely without merit’. There’s one additional factor which no one has mentioned; the nature of electronic trading, which can turn a moderately bad market day into an historically awful one and create a warped sense of volatility.

          1. I’m not sure about that. Since the 1 day crash in 1987 (black monday), Exchanges have put into place circuit breakers that shut down trading if stocks fall below a certain level for an amount of time.

            The main thing about the electronic orders in this case are sell orders. If a stock is trading at $54, an automatic order could be placed to sell at $50. If there are enough of these orders, it could lower the stock price to, say $45, and then another round of automatic sell orders kick in. This creates a cascading effect.

            The circuit breakers that shut down trading I believe work by ensuring that before a stock can start trading again, there have to be enough buy orders placed to match the sell orders at the given sell price (in this case, $50.)

          2. I meant to add, if the stock is trading at $54 and then drops to $50, it initiates these automatic sell orders…

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