Stocks fall as Obama calls for tougher bank rules

AP ^ | 1-21-10

[My Favorite Headache]

NEW YORK (AP) - Financial shares pulled the stock market lower Thursday as President Barack Obama proposed rules that would limit the types of trading banks can do with their money.

The Dow Jones industrial average tumbled over 200 points after dropping 122 points on Wednesday. The index has seen four straight triple-digit swings. Bond prices rose as the stock market became more volatile.

Tightening the rules on how big banks trade their money could hurt profits at those companies.

Broader concerns also dogged investors. Patrick Galley, chief investment officer at RiverNorth Capital in Chicago, said stocks have risen so fast in the past 10 months that expectations about an economic recovery are getting too high.

"The market can be quite fickle just because of the huge run-up that we've had," he said. "A lot of folks have their trigger finger on the sell button if they start to sense that news won't meet expectations."

The market was mixed earlier as good earnings news was tempered by an unexpected jump in initial jobless claims. But banks, which have driven the market over the past year and a half, were the focus by late morning.

The Labor Department said workers filing for unemployment benefits for the first time rose by 36,000 to 482,000 last week. Economists polled by Thomson Reuters were expecting a small drop.

The report provided a grim reminder that while the economy might have improved modestly, a robust recovery is unlikely until companies start adding jobs. The unemployment rate remained at 10 percent last month.

The Philadelphia Federal Reserve said manufacturing in its region fell in January from December. Its index of regional manufacturing conditions fell to 15.2 from a revised 22.5 last month.

[equalitybeforethelaw]

When Community Organizers attack.

Think we need to make this into a T-shirt with a picture of Erkle pointing at the DOW chart. Such a shirt would say it all, would it not?

[Eva]

Obama is attempting to encourage the class wars and keep the unions in line behind him, while he struggles to force his Obamacare, Cap and trade, and card check through the weakened Democrat Congress.

[central_va]

Paging the “Plunge Protection Team”; please pick up the red curtosy phone..

[ssaftler]

This a$$-clown just continues to cement his place in history. Comrade FDR must be very proud to see someone following so closely in his wheelchair tracks.

[equalitybeforethelaw]

Here’s another: Wall Street might just be saying, “If you screw with us, we’re gonna break your kneecaps.”

I vote for this model. Do you really think the banks will accept being punished by bammy for doing things that bammy the community organizer demanded they do. This while Freddie and Fannie go unpunished? Look for the big boys to bite back and slow the economy to a dribble. They, like us, just watched Brown take Kennedy’s seat, do you really think they are afraid of bammy at this point? Their reaction should be very quiet and very vicious. The next thing you know, Sarah Palin may be visiting at GS, WFC, BOA headquarters taking meetings with CEOs and Corporate Economists. Think that would rattle the little Kenyans cage?

[RoadTest]

Raising the debt limit and restricting the banks; this crook’s warp is obviously anti-free-enterprise and pro-collectivism.

I just pray that what was begun in Massachusetts Tuesday doesn’t stop rolling until it dips into the Pacific Ocean.

[DonaldC]

“The next thing you know, Sarah Palin may be visiting at GS, WFC, BOA headquarters taking meetings with CEOs and Corporate Economists.”

That would be great!

[Nick Danger]

truthful headline? from ap? wha’?

No, it's their usual lying spin. The Dow Jones Industrial Average did not go down because Obama proposed "tougher bank rules." We know this because there are no banks — indeed, no financial institutions of any kind — in the Dow Jones Industrial Index.

Nobody really knows what causes these relatively small movements, but the fact that new jobless claims were an ugly surprise is much more likely to be the cause than anything having to do with banks.

The AP, however, does not want to mention the new jobless claims any more than they have to. (And if they have to mention them, they'll call the numbers "unexpected," as if the world were not full of people saying that the worst is yet to come). Instead they'll talk about Obama riding in on a white horse to get tough with banks. Which is apparently popular among people (like AP reporters) who don't know they'll be paying Obama's new bank taxes through their fees.

[RoadTest]

“He is much worse than a bad, bad President. He has aided and comforted the enemy and deserves impeachment.”

I second that motion. IMPEACH HIM!

[combat_boots]

One (0bama) ring to rule them all:

[maggief]

[equalitybeforethelaw]

All 30 stocks on the DOW require loans to function. If the big banks are restricted, then DOW stocks have to purchase funds from smaller banks at higher premiums. Basically, bammy wants to raise interest rates to private industry to curry favor from the socialist crowd. He is too chickenshit to direct the Fed to just raise interest rates. Either way you skin it, bammy is for raising the cost of capital. Don’t know how this will help anything, but it does give bammy an enemy to hate so his supporters don’t start hating him. Its a lose-lose proposition, but its what he knows.

[GalaxieFiveHundred]

Fat, drunk and stupid is no way to go through life, son.

[misterrob]

About time they did this. Repealing Glass Steagall was a huge mistake. Anything that involves tax payer risk has to be tightly controlled and allowing banks to put taxpayer backed depositors at risk cannot be allowed to continue.

No complaining about the stock market, please. Wall St. has benefited at the expense of the taxpayer for too long.

[chuck_the_tv_out]

Thanks that makes sense. I sometimes forget they expect people to think “good, stick it to those banks & their stocks” etc.

Here’s me back on planet Earth thinking “Obama causing a bellweather US index to fall = a bad thing”.

[Tzimisce]

I’m just curious, you bankers and Wall Street types - many of you are liberal Democrat. Are you having any regrets?

[jiggyboy]

No financial institutions in the DJII? AmEx, BofA, GE, JPM, and maybe TRV, that’s five of the thirty.

[the invisib1e hand]

the currency thesis is tautological -- the dollar is up significantly this week. The dow had to correct based upon that.

[Nick Danger]

If the big banks are restricted, then DOW stocks have to purchase funds from smaller banks at higher premiums.

No company that made the list of the Dow Jones 30 Industrials is confined to the United States as far as borrowing money is concerned. Obama could put all the US banks out of business (and he might); companies would just go to London or Hong Kong to get money.

[gathersnomoss]

BINGO! A shocker!