Tuesday, February 19, 2008

Back in Business

Markets back in business today and I'm in full rant mode after I gained 2 new readers over the long weekend. Clearly word is spreading and before long, we'll be pushing a bloggership of 20!

Where to begin? Oh yeah, more writedowns. Credit Suisse magically failed to account for a billion dollars in losses last quarter and is writing down $3 billion total. Barclays is writing down over $3 billion, but somehow, this is good news. And sneaky snakes, American banks, thought they'd just borrow an additional $50 billion dollars last month under new fed rules to sure up liquidity. This however, was not received as good news because we know that they will not be able to freely lend this money for a better rate of return. So why the necessity? Because I can only assume more money is going to be written down and lost forever over the next year as banks continually try to hide their poor credit exposure. Can we punish these guys already?

Great article by Bill Fleckenstein of MSN Money (posted below, don't let the mullet fool you, this is a smart dude) about how we're just in the first leg of a recession, and that's denial. I'm not in denial. I know the credit mess is going to wreak havoc on every nook of consumership in this country. But the market is. Next comes "realization." When Bernanke and his bull-machine fess up, we can get the ball rolling. And finally comes "the give up." We throw in the towel, not every 100pt. Dow day is considered a rally but simply a dead-cat bounce, and we gain full acceptance that our economy is in the pooper.

Housing numbers come out today, should be a bleak story, but anything better than Armageddon will probably be "good news" for the market. Again, denial....


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