The old expression, “In for a penny, in for a pound” is the government’s chosen path. Once involved in direct market interference and manipulation, there’s no turning back. Let’s remember Bernanke studied the Depression and published his views on how that condition can be prevented in the future. Don’t expect him not to put his theories to the test in real time with our money. All us peons can do is stand back and see if it all works. That said, they’re engaged in the following:
- Buying commercial paper directly to unlock the freeze and ease credit.
- Increasing TAF [Treasury Auction Facility] to $900 billion with more to come.
- Coordinated global rate cuts.
- Rates to Fed primary dealers already featuring a stealth rate cut of 50 BPS via auctions.
- Naturally, the ongoing suspicion that authorities will start buying stocks to arrest the slide. Again, once you’ve gone down this path there’s nothing you won’t do.
And, all this from a Republican Administration which some thought was conservative but in fact are just a bunch of East Coast country club Republicans and academics.
Yesterday was a replay of the past handful of trading days--down and dirty. Volume was still heavy and breadth abysmal.
ETF Blog reader and Digest subscriber David Hurwitz always has some interesting insight to lend. The following is his analysis of yesterday’s action.
The Hurwitz View
NYSE Last Hour Analysis | |||
10/6/2008 | |||
Time of Day | Average Percent of Daily Volume | Shares Traded (Million) | Percent of Day |
09:30 -15:00 | 76.5 | 5,660 | 71.8 |
15:00 - Close | 23.5 | 2,218 | 28.2 |
Total | 100.0 | 7,878 | 100.0 |
“Thus, on an average NYSE trading day, the last hour contributes about 23.5 % of total daily volume. Today, the last hour contributed 28.2% of [Tues]day’s volume. So [yester]day’s last hour delivered 367 million shares more volume than average but not in my view an extraordinary burst that might characterize a significant turnaround in market direction, in this case upwards.
The Average Percent of Daily Volume is based on a multi-month study I performed in which NYSE cumulative daily volume was captured at every half hour. This permitted determining the average volume traded on the NYSE each half hour and thus cumulatively through the day.”
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