Friday, February 15, 2008

Dear Ben

Thank you, Master of the Obvious, for announcing that our economy is in the pooper and propelling stocks into a downward spiral as they should be. Unlike market gurus like Cramer who insist that the fed should only make forward looking statements that are optimistic, even if untrue, I was glad to see a bit of honesty in his testimony. But only bit. For some reason, he keeps insisting that growth will pick up in the 2nd half of the year. When is the 2nd half of this year taking place, in 2020? Bernanke said yesterday that housing and credit problems will continue to weigh on the market for perhaps longer than we expected. Well, which is it? Just earlier in the week he said that housing should pick up by the end of the year. That makes sense. Just yesterday, 45 states said that home sales were down and foreclosures were up. 4 states didn't report and the 1 state that had improving sales was S. Dakota. Wow, what a boon for the GDP that will be !

Cramer also recod yesterday that the gov't bail out all of the CDOs and float the mortgages of the millions of delinquent/foreclosure loans. That's great advice. Hey, I bought shares in a company that didn't actually go up. U.S. gov't, can you just refund me the difference in share price? Why should I have to take a loss? These idiots have only one concern, stock prices. They don't want market turmoil because then the 500 stocks they make you pay to get access to might go down and make their record, like Cramers, stink.

In a bold move today, Citibank is not allowing hedge fund owners to withdraw their own money. Can you imagine if you tried to pull money out of your mutual fund, and Vanguard or Fidelity said, "Nope, I don't think so. You have to ride this sinking ship to the bottom!" Nice work fellas, this on the heels of your other hedge fund which has produced a sweet 52% loss in its first 3 months.

Just in case you thought the bond insurers were in good shape, a reporter revealed on CNBC yesterday that he was begged by Dinallo 2 weeks ago to not report that the bond insurers may be forced to sell/be taken over in their muni business and just go kablooey on their subprime CDOs. All this talk of a bailout was smoke and mirrors, with Dinallo knowing all along that that wasn't a viable option. FGIC got downgraded yesterday and in turn, can't offer municipal protection. So for 2 weeks market optimism has been provoked by a lie. Big surprise. Dinallo has an interview in about 10 minutes, will report on that later......

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