Regarding Wall Street's seemingly improbable bounce today, the NYT said it best:
Only on Wall Street can billion-dollar bank losses be a good thing
This diary will explore the unintended irony of this comment, but first:
The Times was referring to the latest bad news regarding the UBS "write-down" (such a euphamism that) of another $19 billion (totaling almost $40 billion for the last nine months, according to the article just linked), which forced their CEO to resign, and also to the news that Deutsche Bank AG, Germany's largest bank, wrote down $4 billion.
Nor was this the only bad financial news today, unsurprisingly:
Home Building Falls for 24th Straight Month
Research Firm Expects Banking Industry to Lose 200,000 Jobs
So by what perverse measure does the current poor economic prognosis and turmoil help Wall Street bounce, and is the rebound only temporary?
One possible clue as to why "bad news is now good news" on Wall Street may be that the Fed has shown it will keep things going as much as it can, and that despite its widely criticised plan-- the investment banks, hedge funds, real estate lenders, and other financial companies appear to have been assured that they will not be held accountable for their failures, bubbles, speculative excesses or bad investments. To put it in plain English: we are picking up the tab..
It's another case of privatizing profits while socializing losses, and most importantly it seems designed to keep the economy afloat just long enough for Bush to finish his disasterous reign.
We need accountability.
Some commentators have championed Obama's speech on the economy last week, and I agree: the speech was great.
But we are being remiss around here at daily kos for mostly failing to see what's happening: it appears the collapse is being drawn out, as if in slow motion, and the result will be our next administration (hopefully BHO's) will be left holding the bag.