Friday, September 5, 2008

Phil Gramm Was Right.

I took the opportunity yesterday to sit back and just watch, look and listen to the markets. Wednesdays pickup in volume to the downside, in hindsight seems to have been a slight tell and something to keep in the back of our minds.

I caught the news yesterday regarding Bill Gross and his financial tsunami comments if the Fed doesn't jump in a "fix it". Yeah sure Bill, more money, more credit. Stunning, truly stunning. Mr. Gross's comments were the inspiration for the title of the article this morning, but not the way everyone thought he intended it.

No the toolmaker at Chrylser is not the whiner, no the plumbing contractor is not the whiner, and no the small widget maker with 47 employees is NOT the whiner. The whiners with a capital W are men, and I use this term loosely now, like Bill Gross of Pimco, Rick Waggoner of General Motors, and Dick Fuld of Lehman Brothers. I could go on and on and on and on but I trust you get the picture.

Business is great at GM, then I am a genius!
Business stinks at GM, then it's someone else fault as I am far too cerebral and forward thinking for it to be mine and beg for Federal loan guarantees.

Great trades at Pimco, we are really savvy market participants.
Trades tanking at Pimco, call CNBC and beg for more credit and a bail out.

Do none of corporate America have any dignity left? Is this what we are left with now in this country? To be frank, Bill Gross's shameless book talking and grovelling schtick is growing old and tiring quite quickly.

So yes Mr. Gramm you were absolutely correct, we have become a nation of whiners, problem is its not the general populace but rather the leading corporate chieftains. We are running into very rough economic seas and we are finding out how truly ill equipped and basically frauds these magnets of capitalism really are. The market aphorism of "a rising tide lifts all boats" has masked much ineptitude.

I used to coach varsity basketball I always believed that you could never tell how good you were when winning by 25 pts for playing under these circumstances was easy. I felt the true test was when you were down by 25. How do you respond? Do you give up and roll over of do you fight harder? I can assure you that when I coached, only the fighters were on the floor for me. I am looking for the fighters out there amongst corporate America and quite honestly I don't see many.

I re-read Mr. Gross's self absorbed diatribe again this morning which prompted this commentary. I am actually embarrassed for him and while he may be shameless he is not stupid. He sees the writing on the walls as to what is going on. Yes, it is scary but government intervention and meddling ONLY EXACERBATES the problems and will most certainly prolong and worsen it !

In Bill Gross and Rick Waggoner's worlds, the weak should survive, the bad be made good. Dick Fuld at Lehman wants to take all their bad paper and put it in a new company. I don't know how to put this any other way but "is he retarded". Seriously, did he fall and suffer a head injury for to think otherwise calls into question his sanity.

Let's hide the rotten investments, right Dick? Let us close our eyes, pretend they do not exist and just hope and pray they will just go away. Fortune 500 CEO. Unbelievable. Better yet, yesterdays 300 + pt drop, lets blame it on the Societe Generale strategists negative comments as it could of course never be due to a deteriorating housing market, deteriorating job market, and business environment. That would be logical and in your shameless world unpatriotic. I will tell you what is unpatriotic, lying about your financial position, lying about suitors looking at your company, lying about performing assets, manipulating your financials with balance sheet chicanery and asset classification juggling. This is what is unpatriotic.

That being said I keep hearing we are nothing like Japan in regards to what is transpiring here, to which I reply, absolutely, we are in much WORSE shape. We have got to take our medicine to get the recovery process started. This is paramount. I cannot stress this enough.

Housekeeping notes;

I was stopped out of my XTO position at $45.45 for a flat trade on 2 units long.

Good speculating to you all and never ever forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 3 units FedEx ticker FDX @ $87.10 stop at $88.16
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 1 unit ticker CRM @ $57.05 stop at $60.62

1 comment:

John said...

Your post is exactly to the point. Hopefully somebody will call a spade a spade but I won't hold my breath.Good post.