Friday, September 19, 2008

Holy Manipulation Bat Man

With respect to my previous blog about short sellers now comes this. Apparently when short sellers "manipulate" the market its bad, but when government policies MANIPULATE the market its GOOD and will bring "balance" back to it. HAHAHAHAHAHAHAHAHAHAHAH!!!!!!!!!!! You see, with the new rules in place, the people who were taking the unpopular view that a stock would decrease (how un-american and communist to think that a stock would actually go down because the fundamentals don't matter any more or didn't you get the memo from Nanny oh I mean Uncle Sam) because of the basic rules of finance are forced to purchase shares to cover their positions. This buying is proping up the market and when it concludes what then? Oh yea another Sunday is approaching so look for another World Saving announcement soon.

Thursday, September 18, 2008

Polyanna to be appointed SEC chief

When you see headlines like this, you should grow very uncomfortable. This is the recipe for the next bubble. When all you can do is buy what are you going to do? Right, buy. Short sellers bring stability and sanity to a market by trying to find the truth in companies balance sheets and trading on what they perceive as an opportunity. I will be the first to admit that there has been abusive short selling and rumor mongering, but I don't recall there ever being a ban on buying certain internet companies stock in the late nineties that had more hype then substance. Short selling is needed and is NOT a bad thing as the media and gov. make it out to be. Much like speculators who grease the financial markets by taking the other side of the trade, short sellers balance out the buyers and keep companies "honest". Both speculators and short sellers are vilified and pilloried by the press for no good reason other than for someone to blame. Remember to have an up you need a down, to have good, you need evil, for happiness you need sadness. Its the way the universe works and the way its intended to be.

Wednesday, September 17, 2008

But its a Wednesday

A few posts ago I wrote about how the Fed. is saving the world one Sunday at a time. Well they couldn't wait until Sunday. The Fed has taken over AIG, the nations biggest "insurance" company. I put insurance in quotation marks because of the fact that if they were only in the insurance business, they wouldn' t be failing. In return for an approx 85 billion dollar loan, AIG will sell its many parts, to pay back the loan, to others all the while paying 11.4% interest to the Gov. or more precisely you. Unfortunately you and I will never see that 11% money except in the form of more regulation after this all shakes out (it will eventually end, whether it ends next month or 50 years from now :) ). The more troubling happenings now is that the overnight dollar loan rate has topped 10%. This means banks are hording cash and lending has stopped because of counter party risk (remember I blogged about counter party risk last year). This is the really frightening thing now.

The Fed will be back again on Sunday with an announcement about WaMu and then after that it gets hazy. Maybe a Hedge Fund you have never heard of or a local bank that bet too much on home developments. Who knows except maybe the CEO's and Presidents of these institutions.

Monday, September 15, 2008

WoW!!!!!!

For a finance geek such as myself today is an amazing (bad, good, scary, down right frightening) day. Two of the biggest firms on Wall Street disappear on the same Monday. Wow is all I can say. Lehman Bros and Merrill Lynch

Wednesday, September 10, 2008

Happy Birthday


As the title suggests, one year ago today we had a blessed event happen to us. Yes its been a struggle emotionally to go to work while leaving the new one to its own devices. I'm constantly on the internet researching places to take the new one so that it and I can experience this world together. It has me wrapped around its handle bar. It's fallen down many times as it tries to negotiate this world of rocks, sand and roots, but its never let me down. It has a voracious appetite but usually loses pounds instead of gaining them with each feeding (of cash and gas). HAPPY BIRTHDAY KTM!!!! (Keeps Taking Money). Anyway here's too year number two, may it bring more time together. ;)

Monday, September 8, 2008

Saving the World one Sunday at a time

I found this quote to be interesting with regards to the Fannie Mae / Freddie Mac debacle.

Update 11:20 PM. This comes via e-mail from James Bianco of Arbor Research:

As of this writing (Friday night, 10:14), it appears no one has a clue as to how the Fannie/Freddie Government bailout is going to work. I guess will have to wait for the now common Sunday night/Monday morning press releases to save the financial system from ruin....

If you???re are keeping score at home we had Sunday night/Monday morning ???save the world??? press releases in August 2007 (cut of the discount rate), December 2007 (TAF), January 2008 (ease 75 bps), March 2008 (Bear) and July 2008 (first Fannie/Freddie rescue) and now September. Anyone want to believe this is the last one (which will be the sixth in 14 months) will be the one that finally works and saves the world?


Along the same line, here's another article to ponder. (for some reason blogger has this italicized)