The market rallied as soon as I predicted a Dow-Jones of 5,000. The Wall Street Journal also suggested that as the bear bottom. Since then the DJ has risen by about 600 points. That means a major rally has lifted the average so high it is 50% of the previous high - 14,000. Such good news.
In today's paper is the unsurprising news that many huge insurance companies are limping and begging for TARP money: Met, Prudential, The Hartford. Others are in good shape: Northwestern Mutual, Mass Mutual, New York Life, TIAA-Cref.
If the gigantic insurance companies become strapped for cash, they have to stop buying equities. They are a major source of funds for Wall Street. There could be a run on some companies, like the earlier runs on banks. That happened years ago with one company located in St. Louis. They had some bad financial news. Suddenly their stock became worthless and they were bought up by Met Life.
The five largest banks in America (Citi, Bank of America, Chase, etc) have recently been called "dead men walking."
A lot of bad news has not come out yet. My prediction of a 5,000 DJ is still a distinct but unwelcome possibility.
