Another Bad Week for Rush Limbaugh
The week started out on a good note for Rush Limbaugh.
But from then on things went quickly to hell in a hand basket for him, and ended on a great note for America and Americans.
On Monday, the market hiccupped and was down a few points
But then, on Tuesday, things got even better for Rush. The Dow Jones lost over 100 points and Rush was gloating, even taking time to blame Obama’s return to the U.S. from his European tour for the market’s fall.
But yesterday, what a disappointment it must have been for the Great One and his disciples.
Stocks closed higher for a fifth straight week in a row. The Dow Jones surged 246 points, or 3.1%, to 8083, a gain of 22% over the last five weeks—its best five-week run since July 1938.
But before I proceed, a word of caution.
This is another post in my continuing series of optimistic—call them naïve, if you wish—notes on our economy.
If you are looking for “negative indicators,” for doom and gloom, for nay-saying, for confirmation that our economy is going to fail, going to blow “to smithereens,” as some have hoped, you won’t find such here.
Nor will one find here “fundamentals,” or financial “pearls,” or economic “nuggets,” words of wisdom, or even semi-knowledgeable Wall Street talk. For that, please consult the appropriate experts.
Here one will only find positive news—blissfully positive “heads-in-the-sand” observations, if you will.
For I believe—silly me—that optimism, a positive outlook, and especially hope that our economy will not fail, may just contribute a tiny little bit to help our country get out of the present economic crisis.
I know, some just cannot wait to prove how wrong I and millions of “naïve” Americans are, but I call those hopes a “heads we lose, tails we lose” proposition for America.
Don’t get me wrong, I am not referring to those true, sincere economic experts who might have a different approach to our economic recovery. I am referring to those who want our economy to fail, at any cost, because they want the present administration to fail…at any cost.
Back to yesterday’s Good News:
In addition to the surge in the Dow Jones, the broader Standard & Poor’s 500-stock index rose nearly 4 percent, having now risen more than 25 percent since stocks bottomed out on March 9, one of its best runs since the Great Depression.
Yesterday’s market rally started, according to the experts, after Wells Fargo announced that it expects to report record net income of approximately $3 billion, or 55 cents a share, for the first quarter. Its shares jumped 32%.
Several other banks benefited from the rally, including J.P. Morgan Chase, jumping 19%, and Bank of America a whopping 35%.
Good news, too, in the unemployment sector as initial claims for state jobless benefits decreased 20,000 to 654,000 in the week ended April 4—the biggest drop since the beginning of the year and more than double Wall Street expectations (Rush, some good news for you: new claims are still at a high level.)
Some experts are expecting the recession to end in September, though most say it won’t be until the second half of 2010 that the economy recovers enough to bring down unemployment.
According to the Wall Street Journal (not a “liberal rag”):
There’s a growing body of evidence that the economy is beginning to make a cyclical turn: wholesale inventories fell by the largest increment on record…and the inventory-to-sales ratio, the most direct measure of supply and demand in the economy, showed that the latter is gradually catching up with the former…Such optimism led many investors to rotate out of safe-haven investments.
And, according to the New York Times:
Signs have been accumulating that the economy, while a long way from recovery, may be bottoming. Credit markets, frozen at the height of the financial crisis, have thawed as the government shores up the financial system. Some of the worst-hit housing markets are edging toward a turnaround as low interest rates reel in buyers. On Thursday, Lawrence H. Summers, one of President Obama’s top economic advisers, declared the “free fall” in the economy was likely to end in the next few months.
(Rush, just to brighten your Easter weekend, the same NYT issue has this article, especially written for you, “As Stocks Surge, Fears Linger About the Economy.” Enjoy!)
For most of the rest of us, the Times continues:
For now, however, investors are setting aside those concerns and grasping good news with vigor. Wells Fargo sent the stock market on a dizzying rally Thursday when it revealed that its mortgage applications surged to $190 billion in the first quarter, a sharp increase that would lead it to a record $3 billion profit for the period. Like other big banks, Wells appears to have benefited from a surge in mortgage refinancing because of ultra low borrowing rates engineered by the government and an exodus of competitors. Bank of America, JPMorgan Chase, PNC Financial and others have had similarly strong performances and are expected to post improved profitability when earnings reports are issued next week.
Rates on a 30-year fixed mortgage dropped to a record low of 4.61 percent after moves by the Federal Reserve to slash target interest rates to nearly zero and ease lending by buying $1 trillion in longer-term Treasury notes and mortgage-backed securities.
Mortgage applications have surged since December, according to the Mortgage Bankers Association. Gary Gordon, an analyst at Portales Partners, estimated that lenders were on pace to originate about $3 trillion in new mortgages, about the same level as at the height of the housing boom, and profit margins had doubled.
And, according to another article in the Wall Street Journal, “Economists See a Rebound in September ”:
Despite the grim news for jobs, economists are seeing more signs of a recovery in the broader economy this year. On average, the 53 economists surveyed expect the recession to end in September, compared with the October forecast last month. It marked the first time since the recession began that the economists didn’t push the date of recovery further into the future. …The economy also is set to get the benefits of monetary and fiscal policy, as the stimulus begins to hit and Treasury and Federal Reserve programs to prop up the financial sector ramp up. Nine out of 10 economists surveyed expect help from the Term Asset-Backed Securities Loan Facility, which is aimed at boosting consumer and small-business loans. Meanwhile, 72% of respondents say the Treasury’s plan to purchase toxic assets will help the economy.
While our markets are closed today, according to the Times:
Stock markets in Asia were broadly higher on Friday, helped by the strong rally staged by Wall Street overnight. But the rises in Asia were more modest, and numerous key markets were shut for public holidays….
The news came amid mounting signs that the worst of the economic downturn may now be over – even though a perceptible recovery remains months off…
And, finally, today, President Obama said that there are “glimmers of hope” concerning the battered American economy, including an increase in lending to small businesses.
I’ll take those “glimmers of hope” any time over Rush Limbaugh’s “Not only do I want Obama to fail, I want this package to fail. I want this to blow up in their face. .. blow everything to smithereens…”
I continue to see the glass as half full.