kaco

Crude reverses losses after natural gas inventory comes in just below expectations at 90 bcf, vs. Street's 91. Aug. crude -0.2% to $61.43. Nat-gas futures +5.2% to $3.45.

Investment banks made a lot of money by investing in crude as the markets anticipated a recovery. But banks are using profits just to clean up and payback the goverment. Credit is becoming even more difficult to get as banks have raised the requirements. Sooner than later this relief rally will end as the real economy remains slugish. Than crude will fall towards the 30 level.

Ongoing Observations on NYSE Volume

The positive sentiment as mentioned before is due to only a few index-heavy waits like banks. This is only a correction of the very depressed mood and hope the economy will recover.
If the economy would reignite, with all the money thrown at it, parcel deliveries and heavy truc producer would be the first to profit.
One mayor heavy truc producer reported a 75% drop in sales compared to last year!. Afther some window dressing the markets will be confronted with some bad corporate news as banks are still providing far less credit towards corpartions as needed (because they need to keep all possible profits inhouse to be able to write down new losses in real estate and bad loans as the recession continous.

If Geithner Plan Fails, What's Plan B?

As Marc Faber already said, covering cracks in a house with plaster helps only of the buyer doesn't see the coverup. But the buyers of these toxic papers are well aware of the pitfulls. Therefore doubt that there will be huge interest for it.

The best thing would be the governement buying those assets for reasonable prices, free the banks so that they can restart their credit machines, reignite the economy and let the taxpayer pay for this transaction by raising VAT on petrol, which is utterly normal in the rest of the world but not in the US. Isn't that strange??? .

This would also help to migrate the country from its oil addiction towards cleaner and alternative energy and even nuclear.

But in the end, who can blaim Obama? Aren't all politicians liers and always come up with only half solutions, as to drastic solutions will disturb the votingbase?

'Fundamental Overhaul' of Financial Regulations Needed

Overhaul is needed of the OTC trading. What has to be reestablished is the central trading place via exchanges with regulated, standarised products where everybody knows the intrinsic value and risks.
Also we need really independent Moody's & S&P's to get unbiased classifications. More regulation only kills innovation and is more a break to the market than a stimulator.
Risk capital should be rewarded beter with higher dividends.
The biggest capital market in the world (USA) should stop subsidizing carmakers and energyservices with cheap oil. VAT on petrol will stimulate alternative energy much faster, free America from its oil independance and depandance of undemocratic oilstates. The Flying Dutchmen.