Just the first bounce

On Monday, October 13, the Dow Jones gained 11%. "We've finally bottomed out, and the market is on the rebound," my Prudential retirement fund rep assured me.

Huh.

I am an optimist. Really, I am. But everything I have read and heard beyond the USA Today and CNN factoids indicates that the world financial system is still tumbling, and this market "rebound" may simply be the bounce of a ball that still has several flights of steps to fall.

Washington nationalized AIG. They have essentially nationalized several large banks (though Secretary Paulson refused to give the government the benefit of actual managerial input); European and Asian governments are earmarking well over $2 trillion for their bailout efforts. Iceland is bankrupt, and several lesser-developed EU countries (Turkey, Azerbaijan, and more) are right behind them. Why are we excited, again? Oh, right- the market rebound.

Why didn't Treasury bills creep up, and the LIBOR go down, too? The TED Spread keeps widening.

"About 10 things have to go right to escape with a mild global recession," said Simon Johnson, an economist at the Massachusetts Institute of Technology and former assistant director of research at the International Monetary Fund who runs the baselinescenario.com website, quoted in the San Francisco Chronicle. "We think the U.S. and the world are heading into pretty severe global recession. Whether it gets worse or not remains in question."

Oh, that's why. Guess I'll keep blogging. Dammit.