Friday, September 19, 2008

Are they inflating everyone out of the mess?

The greatest rally has come, two days of combined gains of 790 points in the dow Jones, wow!! and how much intra-week gains did we have? Is it another classic Bear Rally, this dead cats bouncing you might be thinkin but how high more. Read this post

Deflation was never the concern of America, it is the increase in COL and the depreciation of real estate assets happening concurrently, the only think we saw that really changed was the entire administration style from L-F capitalism , into socialism and with a hell lot of bail out, but to what extent i ask again. The feds are going to be chopped this time, and i don't see why we should not terminate a federal reserve that only purpose there is to direct money into the pocket of cronysm practicioneers. AIG have great skills in building relationship, PR, they bring you close enough to slowly slice up your wallet while you remained happy. DEFLATION?

When i was posting a few days back, they had already put in quarter of a trillion in the system, that was a rough calculation i made, and i said the feds had to take a loan! Even the bankers need a loan now, but who are to regulate their accounting standars , who will be the one who manages all the money movements. They were here to bail out all the wrong investors, but at the same time they allow their intervention to be profitable in the wrong hands.

After the Bear Sterns, Fed Stimulus plans, Numerous amount of cash injections, Fannie and Freddie bail, the ban of shorts, what more do i need to say, the dow still went from 14,000 to 11,000 did the cash infusion worked? If i were an option trader, i would write a put, if i were trading index i would short it big time probably take a double down short! Fundamentally they are not even close to the exit. Technically we are oversold, we are now covering the shorts, we are edging to the mean, but hell if that means after this the support will turn to resistence and we will plough again. 1929 by 80% plummet after a 18% rally.

Treasury is running around to get a loan to support the money used by the feds, even government this big needs to raise cash?Inflation is coming in big time like it or not, and just take a look at indicators, the dollar is up but its an empty can of sardine! TIPS is way strong even though treasury are down, no one willing to risk buying it low! you dont see another 1 trillion being wasted down the road, well i do and that will leave a hole in the deficit we are running and its unfair to everybody.

No comments: