Money meets Congress

The Wall Street rally faded a little off the highs but ended with strong gains. After being up 460, Dow pulled back to up only 368. Of course, the witches were out today, so anything was possible near day's end. Advancers were over decliners almost 7-1 & NAZ is up 74. S&P 500 FINANCIALS INDEX has been leading the charge upward with a very strong finish at the end, up 29 to almost 303 essentially on the high of its recent trading range.

I get a sense that reality is starting to sink in. Chairman Bernanke met with Congress last night & sort of scared them about the consequences of what would happen if they did not pass new legislation. Now they've had a day to think things over. I suppose everybody is looking at the political implications in everything. After all, an important election approaches to select the next president of the US. Reality tells me that politics will play a big part of the massive changes coming to financial markets.

Meanwhile oil had a pretty good day (as the inflation threat rears its ugly head):

CLV08.NYM

Crude Oil Oct 08

__104.55

__ 6.67 (6.8%)

With markets up big-time, gold pulled back 33 to 860 (that money went to buy stocks). The Alerinan MLP index rose 19 to 241, normally that might be a decent YEAR! Of course, it was coming off a 3 year low & still yields near 9%, for those interested in yields. The DOW JONES EQUITY REIT INDEX rose 3 to 267 after a very strong close. Generally they have followed the lead of banks, but not as impressive today. This may come as a shock, but junk bond funds rebounded 10-15% from overly depressed levels with yields over 15%. For this group, a 10¢ move (maybe 2-3%) is a very big deal.

My article on REITs was just published at SeekingAlpha, check it out.

Why Buy Real Estate Investment Trusts?

Not much is happening in the business world over the weekend. But Congress will be working on legislation which will shape financial markets going forward. Follow events, nobody knows how that will come out.