My Left Foot Little Toe Nail

March 3, 2009
1700 - 2100 hrs

Though the general trend of this market has been down,
know that there will be some major rallies in between.
Bear markets tend to take out Bulls and Bears. The
best traders are typically the ones that do well in
Bear markets because they trade with a very open mind.
I do know that wearing Rose Colored glasses, whether
Bull or Bear is fraught with danger.

---

"No Congress of the United States ever assembled, on
surveying the state of the Union, has met with a more
pleasing prospect than that which appears at the present
time...."

- Calvin Coolidge, Dec 4th 1928

“Profit and earning ratios are starting to get to
the point where buying stocks is a potentially good
deal...if you've got a long term perspective on it.”

- Barack Obama, March 3rd, 2009


We are going to spend $4 Trillion dollars this year.
The estimated deficit will be around $2 Trillion. And
the tax numbers are based on some absolutely ridiculous
assumptions with regard to GDP growth, employment etc.,
All this while the administration keeps concocting plans
for some grand spending. Last I heard was that its
impossible to spend one's way out of a problem, when
the problem was/is reckless spending in the first place.

As said before, when Japan had issues in the 90s, US
lawmakers advised that it would be good if there was a
recapitilization of banks. And now, we are doing what
Japan essentially did - piecemeal capital infusions
without the political will to put some into receivorship.
Yes, I do realize that the world is a much more complex
place now and there is a pronounced cascade effect
because of counter party exposure etc., But what we're
doing now is pulling off a bandage very very slowly.
What would happen if counter party risk was isolated
to geographical exposure and then countries got
together in some sort of joint receivorship deal?

There's a whole plan on the Public-Private Partnership
that's apparently in the works and that will revive the
markets. Fact is that private money is likely loath to
come here and partner up as its has gotten burned by
Corporate America's profligate ways, American consumerism,
and now an ever changing and ill-concocted plan about
plans for financial market resucitation by the Government.

America does not need new Cars, new Homes, new gadgets,
whiter teeth, or Silicon replacement parts for certain
natural parts of the human body. As long as we believe
that we can simply spend our way out of the problem,
hazard is near and replete.

--

My Economist/Macro PM friend, VO sent me a link to the
paper below :

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=227273

Note the third author of the paper is Larry Summers.

Now, there is going to be a transactions tax on traders
like myself that trade quickly. This paper is the
birthplace of that ruling. It is assinine because the
final point of the abstract pointedly states a belief
that making assets illiquid (by discouraging continuous
transacting) will no longer subject them to the whims
of the market (and micro supply/demand) and is similar
to taking a firm private -- to enhance value.

MY LEFT FOOT LITTLE TOE NAIL! I really do believe
that this is a similar foray like the one where they
abolished the "short sale" for certain companies. It is
misguided and it will blow up a whole industry.

Hyper Myopic.