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Friday, November 21, 2008
Cabinet Choices Delivered a Rally, But Can They Deliver a Solution?
Neil Cavuto, Managing Editor & Anchor
FOXBusiness
Missed tonight's Cavuto? Catch "The Deal" right here on FOXBusiness.com
What a Cabinet choice!
What a game changer!
What a rally maker!
Not Hillary!
Tim!
Here's the deal:
He doesn't have her name recognition or famous spouse.
Even though he's worked with her spouse.
Actually, Tim Geithner has worked with everyone.
President of the New York Fed, some are already calling him this president's best cabinet choice yet.
A man who's worked with this Treasury Secretary on what some call the rescue to nowhere...now the next Treasury Secretary who has to get that rescue going somewhere.
He'll have company.
Bill Richardson’s going to Commerce.
And talk our friend Austan Goolsbee could be going to the President's Council of Economic Advisors.
Not all signed, sealed, and delivered...But enough signed and enough sealed, to deliver a rally on Wall Street today.
The markets were essentially flat before word of these appointments started leaking out.
That changed...fast.
Because some on the Street seem to think this Cabinet could change things fast...
Who knows? This much we do know.
With Hillary Clinton at State...it's not only a Cabinet of rivals...it's a Cabinet of considerable heft.
And these days, red or blue...what these guys who like green more than anything else want is a new administration with heft and clout to get things going...and fast.
FOX Translator
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No, it's not a dance craze. Contago is a condition of supply and demand, essentially a fancy word to say that prices for items, typically commodities, are cheaper now than they would be at some point down the line.
Anything that¿s sold in the futures market can be in a case of contango. Futures are exactly that: a contract to buy an item or asset at a price in the future. This is the case with oil, with traders buying and selling contracts to acquire a barrel of oil in months down the line. When a market is in contango, spot prices, or the price of a commodity if you were to buy it right now, are lower than forward prices.
Why is that important? Well, it usually tells you the supply of a given commodity is plentiful (since, according to Economics 101, a large supply usually leads to cheap prices).
Incidentally, if you think contango is a mouthful, its opposite condition is known by the equally tongue-tying term backwardation.
