Providing Aid to the Disabled

According to MarketWatch:

U.S. stocks erased half their earlier losses on Thursday, after Standard & Poor's suggested (see "S&P Says End in Sight for Writedowns on Subprime Debt") the bulk of write-downs linked to bad home loans may be behind for banks. The statement helped to partially offset concerns about the potential collapse of a fund owned by Carlyle Group and another weak report on retail sales.

"It just seemed like it was getting a bit overdone to the downside," said Robert Pavlik, chief investment officer at Oaktree Asset Management. "But the negative feeling remains in place and the concerns over Carlyle and financials are still in place."

As far as I know, S&P (and its peers) never saw any of the bad news coming, so how is it that they are now able to see the light at the end of the tunnel? That's aside from the fact, of course, that the various rating agencies have already confirmed their grotesque incompetence (or, perhaps, their blatant disregard for the law) by maintaining AAA ratings on companies and securities that clearly don't deserve them (see "Moody's, S&P Defer Cuts on AAA Subprime, Hiding Loss").

I suppose this is simply further evidence that the IQ of most equity traders would easily qualify them for long-term disability assistance.

On a positive note, it's good news for the realists - er, I mean bears. They've been given a great opportunity to sell overpriced equities at higher prices.

Comments

[Tony Soprano:]

More negative palaver and its about what? Something we don't already know?

This is old news from old and yellowed newspapers and yellowed bloggers.

If the market takes a dip or plunge. Buy!

2008 Mar 14 06:45 AM

[J. Fredrickson:]

Why would anyone believe that they can see the end if they didn't even know when it started? Why would I believe an incompetent company that can't seem to find the resolve to downgrade bonds based on there own rating criteria? Maybe if Fitch said it, I would take it a little more seriously, but come on, S+P with credibility, that went out a longtime ago.

And to Barney Frank, that is just what we need, the U.S. government as a landlord...I'm sure the bureaucracy surrounding that won't be a problem.. I know that we need to save all our poor buddies in the financial industry..Thanks Barney I know my kids will appreciate that, and their kids, and probably their kids as we continue to print money and watch it float into the abyss.

2008 Mar 14 09:52 AM

[Jan:]

As a mentally Handicapped person I am insulted to be compared to equity traders. My handicap did not occur until after I double majored in finance and merchandising. I saw this coming a mile away, anyone who has taken any economics course or finance course also would have seen this coming. Please limit your comments about the handicapped to what you actually know, and not insulting slurs.

2008 Mar 14 11:55 AM

[damienhaas:]

So true, Great Article! There are good equity trader but there are even more traders that are describe in this article. Look at what happen on Friday?

2008 Mar 14 10:16 PM