Dow Spikes On Treasury News
ROBERT SIEGEL, host:
Once again, the big story today was the Obama administration's plan to get the so-called toxic assets off the books of the banks that bought them, and one place where that plan got rave reviews is the floor of the New York Stock Exchange.
The Dow went up today by nearly 500 points. That's almost a seven percent gain, which means that it must have been a big day for Ted Weisberg of Seaport Securities, who is a floor trader at the Exchange and a frequent guest here. What was it like today?
Mr. TED WEISBERG (President, Seaport Securities): Well, it was quite busy, and up 500 points is a pleasant change from what we've been dealing with for the last 16 or 18 months. So it was well received, and folks all had smiles on their face.
SIEGEL: Now, was it all the Geithner plan, or was it other news?
Mr. WEISBERG: Well, I think it was the Geithner plan. I think it was a better-than-expected housing number. Perhaps those were the two culprits that we can give all the credit for for today's rally, and then I guess we could throw in a little short covering, and the combination of all three, we're up 500.
SIEGEL: I think the future has actually started going up when it was understood that President Obama, on "60 Minutes," would not support - would not plainly come out in favor of that big tax on bonuses that were paid by AIG.
Mr. WEISBERG: Well listen. That - no question that that was a problem last week, and I think one of the problems that the market has had for the first two and a half months of this year is that, unfortunately, politics seem to be trumping the economy.
I suspect that a lot of the programs both put in place by the past Bush administration and the current, new administration, the Obama administration, in terms of getting the economy out of its doldrums, were well intended, and in fact with time, I think we'll see a lot of positive traction.
But all this was being overshadowed by a lot of the politics in Washington, and unfortunately the focus - when it's politics and not the economy, at least when it comes to the stock market - is not necessarily an ingredient for a good market.
SIEGEL: I gather today's gains were fairly broad. It wasn't just one sector or another. Things just generally went up.
Mr. WEISBERG: Yes, it was across the board. I mean, as we speak, and I'm looking at my screens, there is virtually no red anywhere. I don't know. In the S&P 500, I'm sure there are some stocks that did, in fact, not go up today, but I would - my suspicion is that the very vast majority of them, in one way or another, all ended up in positive territory.
SIEGEL: What does that say to you? Does it say that this is about atmospherics and a broad sense of optimism, or does it say that there are real indicators about the real economy of the country, which suggests perhaps the markets were undervaluing them?
Mr. WEISBERG: Well, I think we have to - we don't have to, but I tend to view the markets as irrational no matter where we are, and there is absolutely no such thing as a rationally priced stock market or, for that matter, a rationally priced stock, and the reason for that is that the equation is so influenced by human emotion.
In terms of the stock market, technically the market is dramatically oversold. January and February were particularly bad months, after closing out the year on a slight rally but still down about 35 or 38 percent from the highs.
And so when you add in the damage that was done in January and February, which had the market as low as - the Dow as low as around 6,500, I mean we were deep, deep in the hole.
And so a lot of folks expected a technical rally, and certainly we have a technically rally, and it - quite frankly, it can't really be viewed as anything more than a technical rally because the major trend is still negative, and we are still in a bear market.
SIEGEL: Thank you. Ted Weisberg, floor trader, talking to us from New York, and you're listening to ALL THINGS CONSIDERED.