rather than pick out individual stocks to trade, it can often be worthwhile to trade the indices themselves, especially in times of high volatility.

for those so inclined, i attach below charts for FTSE and FTSE 250, though one might equally be tempted to trade Dow or S&P, which is significantly broader in its coverage, or even NASDAQ

for ease of reading, i have attached 1 year and 3 month charts in each instance

I'm sure there will be a big bounce at the open similar to last Friday IF it is ratified by Senate but if the market hasn't heard for sure by Monday then a crash is on our hands.

IMO

I wouldn't bank on markets rallying for too long. The next question they're bound to ask is, "what happens if this doesn't work?", and if there's no immediate impact after the package, "what do we do now?". Actually, if the impact isn't major, people will probably ask..... was a trillion enough? Maybe we need more.....

People like an instant fix. I'm not sure a mess built up over several decades can be fixed instantly though.

In my opinion.

Strawbs.

i wasn't necessarily looking for a long (initial) rally ...... in any case, as we all agreed earlier, sentiment is the driver, and as long as peeps feel things are rather more stable, the market and general spending will improve ..... obviously there will still be days of wild swings for all sorts of reasons

Yes I was talking for one day only.

That'll do for me!

They're talking about giving the money in drips and drabs whch IMO could be a disaster for the markets.

I seem to have left myself very exposed tonight for some silly reason - on the ftse I mean of course! Not sure I dare retire at my usual early hour, though I like to think that Bush will be urged to say something sensible enough for the market to rebound just a little by morning.

Bush is due to speak at 9pm US time - that's 2am here.

I watched a bit of the Paulson/Bernanke thing on Bloomberg last night. I thought one of the senators hit the nail on the head when he said "you can't borrow your way out of debt". The $700 billion bailout may slow the rate of the problem, but it won't actually fix it. Assuming it works and manages to reopen the credit markets, all that happens is companies that would otherwise be bankrupt can struggle on for a bit longer. The sensible ones, having been so close to collapse will just do everything possible to avoid being in the same position again. That means job cuts, asset sales and significantly slower growth. The others, will probably keep running up debts until they simply go pop. The bailout may avoid a meltdown in the financial system, but it won't avoid a long and painful recession.

In my opinion.

Strawbs.

In my opinion.

Strawbs.

Maybe but surely the point here is what will happen if they don't do it. I don't think it will be a financial collapse as you say but rather a total economic collapse around the world which means eg most pensions will go to start with, therefore a massive % increase of people living in poverty for the rest of their lives.

IMO it would make the great depression look like a tea party. Marx might have it right in that this is the last stage of Capitalism.

you both seem to miss the point entirely ..... it is confidence that is lacking - i.e. the banks are afraid of or lack the spare cash to lend to each other, which then spills over into the rest of the economy ..... that said, none of this cataclysm looks to have (yet?) affected either the shipping or the chemical worlds, both of which are usually first clobbered

That's my point. The likely outcome is probably going to be the same, bail out or not. The only difference being one is a massive shock to the system, the other a long and protracted one. Governments will no doubt prefer the later as they won't be in power to clear up the mess. Don't get me wrong. I think they've no choice but to spend the money, but from an equity point of view, I don't see this as a long term positive for the markets, just a short term fix.

In my opinion.

Strawbs.

Try not to be too arrogant cynic.

It is not just a question of confidence. It is a highly complex issue that is beyond the boundaries of even you. If the package isn't ratified then most banks go bust -simple and I know for a fact that our government does not have the money to pay anywhere near the 35000 payout so most people will lose a lot of money. No banks = no credit. All credit withdrawn = total system failure.

Perhaps Cynic they're justified in the lack of confidence. So far debt defaults have been centered around sub prime. If it starts moving into prime, credit cards, auto loans, corporate loans etc., then the banks will have a whole set of new problems on their hands. I suspect they're so thinly capitalised they just can't risk lending to anyone who might default, hence the crisis in the money markets. Self preservation instinct. If unemployment starts accelerating, I suspect we'll be here again next year talking about another $700 billion bailout (or more). You can't borrow your way out of debt. The hole just gets deeper and deeper.

In my opinion.

Strawbs.

rumour that it will be ratified early tomorrow which is why shares have just moved positive.

I'm sure someone on the radio said that Congress breaks up tomorrow, ahead of the election, so I assume if it's not tomorrow then it won't be until after the election. Not sure when that it is though. Think the odds are they'll pass something. I can't imagine any flavour of party wanting to risk market turmoil in the run up to a presidental election.

In my opinion.

Strawbs.

Strawbs .... i generally agree with you, but not this time

1) There is absolutely no way that the decision on the bailout will be left until after 4th November, being election day.

2) I do not believe the bailout will be ratified early tomorrow, for both Congress and Senate will want to make life as unpleasant as possible, especially for the Bush administration ...... my guess is that it will be ratified very late on Friday night (EST)

3) For sure the bailout will be modified to some extent, but Bernanke never pretended that his proposal was either written in stone or not improvable.

3) I know I am very stupid in these matters, but it seems to me that if US Gov't (taxpayer!) buys up all the "questionable debt" at fire-sale prices, they will probably do very well out of it in the medium/long term ..... for sure there will still be a certain amount of default, but I suspect a damn sight less than if the banks were left with the stuff on their books, with inter-bank lending getting tougher and tougher and more expensive.

4) The bailout will most certainly NOT cure (m)any ills, but it will (imo) improve stability and, de facto and subsequently, confidence all round ...... It is this at the end of the day that will govern the depth and longevity of (any) recession.

I think we've disagreed a few times Cynic. ;-)

Any idea who's winning so far. LOL.

Strawbs.

Senate meeting at 10am (US) to discuss

Looks like markets are treading water waiting for the announcement. I was tempted to go long equities in the hope of a big bounce, but I figure everyone will be doing the same. I think I'll watch from the sidelines now until the dust settles. The door's very small if everyone runs for the exit at the same time....

In my opinion.

Strawbs.

Dow indicators are all over the place .... now showing +102 but were in small neg territory for a while after GE warning ....... was somewhat overexposed on Dow so have closed some of it at a modest but very acceptable profit