But tonight's big overnight story: Bank of America is getting US$20B in direct taxpayer money and Federal pledges to backstop another US$118B in losses. They're blaming post-merger found losses at Merryl Lynch, tho' really the only part of that's which is almost certainly a lie was the "post-merger" part. There's an amusing stock-price chart at the link, and by "amusing" you may read "infuriating." Stockholders are furious, now. Go fig. (Bloomberg story here.)
BoA has moved its earnings announcement up from Tuesday to Friday, 7AM EST; nobody knows why, rumours are of a short squeeze. (That big EOD rally? Led by financials. And stock futures are sharply up on news of yet another taxpayer money spigot being hooked up.) Minyanville had some commentary on this earlier Thursday, when rumours started flying late in the day.
Some of this is typical negotiation bluster, but California Gov. Arnold Schwarzenegger says California will be insolvent within a few weeks. Nationally, yesterday's report of a US$850B stimulus package was slightly wrong; it's $825B. For now. How does anyone think the US can just keep doing this? Looking forward from the last few months, you'd be looking at a US budget deficit of well over US$2-3 trillion with a T and rhymes with T, and stands for Trouble. Picking the middle range you get 17% of GDP, in a year, just of deficit. You want to sell that many Treasuries?
Ireland, by contrast, is making cuts to try to prevent that sort of thing from happening. Over in the middle east, Brad Setzer thinks Gulf-state sovereign funds have been hurt quite badly, but calling his opinion an educated guess given the lack of data.
Marketwatch lists Six Brutal Facts About Your Nest Egg. Minyanville talks about deflation and effects thereof - read that one, Kevin's pretty good, and talks a lot about societal mood. Mish does too, tho' to my mind less convincingly. Oh, and since the election, I've seen a lot more GOP-conservatives trying to paint this scenario as Atlas Shrugged and themselves as Randians. Sorry, fuckers, you can't spend a decade and a half being Paul Larkin and then spin 'round and declare yourselves the heirs of Dagny Taggart. Stop masturbating and start facing reality, if that's even possible.
Societe Generale's Albert Edwards says the US is likely to face a depression, and to sell any stock rally. Oh, and by the way, China could implode fiercely, and a likely alternative to that is a global trade war with China. So now both sides of the Atlantic are making implosion calls for each other, and saying the Pacific will implode too. (The last time I saw intelligence reports like that,* both sides were right. Not cheery!) And Hugh Hendry of Eclectica told CNBC that there is no money waiting on the sidelines - it's a myth; don't expect that rescue.
On the other hand, the stock market failed to break through December lows on Thursday, so that's something. (The only thing lower was the crash close print in late November, in the mid-7000s on the Dow, so under that you nave no support.) Is tonight's BoA action what daytraders refer to as a sticksave? If so, well, those have not been lasting more than a couple of days. So good luck, and enjoy the long weekend.
*: 1913. Austria-Hungary and Imperial Russia. Long story.