Tuesday, September 16, 2008

Some Things Just Don't Change

So what does one say about a day like today. This market is whipping back and forth, rewarding and smashing both longs and shorts with equal abandon but really this is not the problem. The problem besides the government nationalising each and every business in the country was on display today as CNBC played ping pong with the AIG rumors mill. Resident rumormonger-in-chief Charlie Gasparino, came on pom pom TV to report that the Feds were back at the table for an AIG bailout. Then only a few minutes later, David Faber came in to report that a private deal was all but dead. To which, Steve Liesman added that he had called the Fed and Treasury and they reiterated Paulson's comments from the day before of no Fed bailout.

Where is Chris Cox over at Keystone Cop headquarters? Oh yeah, he's busy rustling up more short selling restrictions on the financials or better yet any stock that is dropping. He's really busy investigating various hedge funds and their bear raiding collusion via lunching and email patterns. Maybe he should stop harassing legitimate traders both long and short and start investigating lying dirt bags like Dick Fuld, John Thain, Mudd, et al. Oh no can't do that, to much career risk in doing that.

What also angers me in this is that traders are getting steamrolled by this type of misinformation campaign. This lack of policing is destroying our capital markets right before our very eyes. These speculators that everyone loves to hate provide the backbone of our capital markets, LIQUIDITY !!

I do believe we are witnessing the destruction of what was once the greatest capital market the world has ever seen. The confidence to transact business on a fair and unbiased basis is being destroyed by the I see nothing, I hear nothing Seargent Schultz-like attitude of the SEC. First we let Wall St. royally screw over scores of international funds by selling them toxic paper with bought and paid for fraudulent AAA ratings. Then when the stock gets punished, these same Wall St. firms lie that their capital positions are adequate yet go hat in hand to sovereign wealth funds pleading for money. And by golly they get it! Unbelievable. And then when the firm blows up and is sold for peanuts, golden parachutes are awarded to senior execs. Did I miss something? Oh yeah, I did, lobby local congressman and senators to go on pompom TV and wax how FASB 157 is onerous and in precarious times such as these should be suspended. Yeah that'll fix everything.

If I didn't know better I would think that these captains of finance, men like Paulson, Bernanke, Dodd and Frank, Fuld and Thain, were purposely and consciously trying to demolish the system.

I keep hearing systemic risk every time a corporation is in trouble. I almost hear it as much as the economy is resilient. Well if the economy is so damn resilient why are we bailing these guys out then? If the economy is resilient and the underlying fundamentals are strong then let these pieces of garbage fail !

I have news for you, NO ENTITY IS TOO BIG TO FAIL and for sake of argument let's pretend some are. Well, if so then the system we have isn't worth having anyway and should implode.

In the markets I DO NOT TRADE the Russian, Pakistani, Indian, et al stock exchanges for a reason, I simply do not have the confidence in them to do so! This may be shallow or ill informed but this is my position. I also don't play poker with guys who wear a baseball hat pulled down just above their sunglasses. No, check that, I will play but I get to wear my welder's mask as to even the playing field !

I have no confidence in many of these foreign market's bid/ask spreads, order execution capabilities, etc. I realise many out there do and more power to them. But I trade New York primarily and Toronto and London because I have confidence in them. Our markets are crumbling before our very eyes and I an not talking about the fact the numerical value is dropping. That is a fact of markets, they go up and they go down.

As if it wasn't enough to hear of Fannie and Freddie execs Mudd and Syron getting tens of millions in severance we now we get news that several Merrill execs led by uber-useless John Thain are in line for tens of millions of compensation for arranging a take under with Bank America.

I don't know much but what I do know is this is not the way forthright, transparent, unbridled, capital markets function, no matter what the talking zombies on TV may say to the contrary.

When is enough enough? Rick Santelli is right when you look to our flag you would now expect to see a hammer and sickle. Pathetic.

Housekeeping notes;

I was stopped out of my long DIG position today at $60.40 for a loss of almost $4pts on 1 unit only to watch it finish the day at $67.50.

Good speculating to you all and never 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 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62


Anonymous said...

Am I dreaming? Please somebody wake me up...Where is writtent that the fed`s job is to buy an insurance company...Just for those that live in a fantasy world...I though their job was to set up monetary policy...In USA, not even an Insurance company can go bankrupt any more...W t F is going on here?

Anonymous said...

The FED has become a pwan shop. What does it mean when your central bank becomes a pawn shop? Probably that no one is broke in this country, they just have liqiudity problems!!! Yeah, right!!!