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The Next Treasury Secretary?


Inheritor of current crisis still in question.

There's got to be a morning after
If we can hold on through the night
We have a chance to find the sunshine
Let's keep on lookin' for the light

The love theme from Poseidon Adventure seemed appropriate yesterday: While there was love around the world, along with renewed goodwill in America, for doing the right thing and electing President Barack Obama, the stock market was looking ahead to tomorrow's jobs report. Well over 200,000 jobs were probably lost last month.

There was a morning-after feel to the market yesterday. It wasn't buyers' remorse, exactly, but there was a pause: We found ourselves in the middle of a vast ocean of problems for as far as the eye could see.

The last minute sell-off also re-emerged yesterday; though there wasn't a sense of unbridled fear, there was a sigh of disgust. Very few things worked, and cheap stocks got cheaper.

I'm worried about the market today - and not just because the economic reports are poised to provide further shock and awe. The financials are looking ugly again. The news from Ambac (ABK) and MBIA (MBI) was disastrous, and there's a sense of urgency there that means either government intervention - or a 21-gun salute. But so many different industries are asking for help that it's conceivable that none will receive it in time.

I guess the auto makers could last until late January, but the mortgage bond insurers probably need help right now. The Financial Spider is in the midst of making yet another lower high, after a brief rebound off a double bottom.

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Wells Fargo (WFC) will sell $10 billion in common stocks to facilitate its planned takeover of Wachovia (WB). But this was an all-stock deal - so why does the company need so much dough? I realize it was going to raise $20 billion previously; this may therefore suggest limitations on how much capital it could raise in this environment. It's a poor commentary, to be sure. By the way, JPMorgan (JPM) is doing the deal, which seems almost Twilight-Zone weird.

Goldman Sachs (GS) begins its massive 10,000 jobs layoffs, and General Motors (GM) is expected to make an announcement of a significant jobs reduction.

These and some other earnings reports added to an already sloppy close. Stocks were down in the aftermarket and nearing key support points. The Dow Jones Industrial Average finished beneath its 20-day moving average. There may be some support at 9000 - then look for folks to start talking a re-testing of the lows.

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No positions in stocks mentioned.
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