Tuesday, February 10, 2009

Flu Season

Sorry for the 10 day absence, but it seems the combination of having 2 little kids and taking care of 40 sick people a day eventually gets to you. But as the pink crustees leaves my eye and I'm actually allowed to use my computer again, it seems fitting that I return to you on a day where Geithner scared the poop out of the world's pants and came across as an intern, not a specialist, leaving the market down almost 400 points and gold back on its march to 4-figures.

Despite assurances from the likes of Rogers, Soros, Hudson, and Janzsen that printing a trillion dollars may actually make things worse, Obama's crew rampaged over the last week to stir up the necessary stimulus votes. We must do something. That thing, apparently, is never to write down the debt of our crippled banks and force them to swallow the sour pill. No, that thing is to make more credit available to our debt-demised consumers and homeowners in a last gasp to spur spending and grow the economy. I'm reminded of a Philip K. Dick story about a creature in a small town that could reproduce any object on demand, until so overused, by the end it could only churn out sludge. The townspeople became enraged and destroyed it, never taking responsibility for their own selfishness.....

The debt on Bear Stearns has already cost Americans $4 billion dollars and projections are now that their assets will always be worthless, possibly raising the bill to $30 billion. But don't worry, JPM is on the hook for the first billion, so we'll be ok.

Japan's GDP is shrinking 10% a month, and England, already having admitted to being hours away from nationalizing their entire financial system a few months ago, is perhaps in much worse shape than we are (is that possible?). China is grinding down faster than anyone would like to admit, and yet people are still buying stocks amidst the optimism that the government can somehow make this all ok. I thought we'd be under 7K on the Dow by now, but I may be proven right sooner than later.

The bad bank plan has been scrapped for the moment and a plan to stem foreclosures is impending according to Geithner. Well, I won't be holding my breath. Neither should you. Call your bank and inform them that you'd like to pay them, but that you might need their help. No bank wants additional delinquencies or foreclosures right now. They just can't afford it. Ask Wells Fargo, down to $16 today....

Don't feel an urge to buy anything right now, except maybe oil or gold. All of those people rushing into BAC or JPM the last week ahead of this announcement just got shot.



Tiger Coach said...

Ax.. Tis the season... You take care of everyone else, and you get sick. Hope you are feeling better.. Went out with Pete, Englander, and Weinberg the other night.

Should be a big drop next week... we are moving into the despair mode... OIL, and precious metal may be the only things that are of real value in this economy!!!


Tiger Coach said...

P.S. Deflation is hitting dairies now... did you ever see milk dumping during the Depression.... it's going to get a bit CRAZY!!!

AX said...

Well, we don't produce anything and S&P had negative earnings...I think you're right!