Barely Informed Stock Market Prediction of the Day

Wednesday, July 16, 2008
It's 2:03 pm and the stock market is up 162 points. Yahoo Finance is reporting that the jump in stock prices is because of the dropping price of oil and good earnings report from Wells Fargo. The oil price is definitely a factor in this rally. Another factor might be the shortsellers buying out of stocks. This would be especially pronounced today, the day after Bernanke banned a certain type of short-selling (the most highly speculative kind) on Fannie and Freddie and other major stocks.

My prediction: the stock market's gonna end up today (80 points), but tomorrow there's going to be a commensurate sell-off, as the fundamental problems reassert themselves. One of the problems is: are America's two largest mortgage institutions about to fail? Do they have enough money to run themselves? Government bailout talk aside, can we expect them to get better or worse?