Stocks: My call, 3-5% hit. Actual hit as of Wed close, Dow off 4.5%, S&P off 5.0%, NASDAQ off 4.0%. Top end of my predicted range, though still in it.
Crude Oil: My call, down 0-3% on perceptions of zero added demand from the "stimulus." Actual as of close, down almost 5%.
Metals: My call, an immediate 2%+ spike in prices. Actual as of close, 2.2%. And as of this morning, foreign indexes are indicating another 2% rise for today.
The damages will continue now that it's become apparent that Timothy ("the only man for the job") Geithner has no real plan at all. What the markets are looking for specifically is either a straightforward objective easing of the mark-to-market rule (FAS 137) available to all banks that would allow them to work through their toxic assets, or a solid indication that the Treasury plan would develop some other method of letting them shed those assets without violating their capital requirements. A buyout pool backed by the Treasury would do the trick. But they got neither. Vague assurances that a few of the favored might get picked for politically-steered salvation does nothing but fuel fears of a Chicago-like corruption favoring only the Friends of the Connected.
The credit lockdown will not ease until one of those two things happen. The Bush admin approach of buying bank stocks to shore up capital was a dismal failure, as it did not address how to get those toxic assets off the books. Until and unless those toxic assets can be somehow brought off the books and sold at rational prices, banks will stay clenched, a sword hanging over each of their heads by a thread, and the thread ends held in Washington by decidedly avaricious pols. The only other salvation there is for some fo the larger banks to start reporting profits despite the government's market meddling.
Banana-Bama politics. Even as leading indicators start to firm up, indicating a bottom, the admin seems intent on talking the economy down. Mr. HopeChange had better drop the fear-pimping and get back to selling that Hope, and soon, or an extension of the recession becomes a self-fulfilling prophecy. So far Congress and the White House have done their best to stretch it out. Time to quit digging.