Rally on strength in cyclicals, agricultural stocks, insurance and banks. Markets are up for a couple reasons this morning. Most importantly, there is a sense that efforts are being made to address the credit problems, whether it is:
a) Major players in the mortgage business offering to freeze foreclosure for 30 days in an effort to get home owners into longer-term, more stable mortgages they can afford.
b) As mentioned before, Buffett offering to assume $800 billion of municipal bond-related insurance liabilities from Ambac , MBIA and FGIC. The good news here is that it would free up capital for these companies, but more importantly it would prevent contagion into a healthy market (munis) by separating the businesses into "good" (munis) and "bad" (CDOs).
Also, one trader noted to me that Buffett had said stocks appeared to be fairly valued; while this is hardly a ringing endorsement of the market, it does appear to be an improvement over last year, when he said he couldn't find any value in the market.
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