Friday, March 13, 2009

We've Lost Our Way

Yes, finally Madoff has gone to jail, and Madoff-lite, Mr. Stanford will be joining him shortly. But continuing my abbreviated rant from the last post, we are witnessing all-out fraud by our government. Does anybody blink when the C-level officers use their stock options to leverage margin accounts at their own firm (yet another GS debacle)? That was this year. Last week, after Citi plunged below $1, their execs loaded up on stock. On the surface, sure, good for investor confidence. But this was Friday. On Tuesday, CEO Pandit leaks an internal memo saying that the bank has been profitable this year and those execs are rewarded with an 80% gain in 4 days. Is that not an SEC violation? What if I printed a post saying Build-a-Bear was bankrupt, what would happen? That's illegal.

The markets also responded favorably Tuesday to a quote from Bernanke saying the recession could be over by the end of the year if we stabilize the banks. Consistent with the horrible reporting standards of the MSM (nice to see Cramer's PR rep has told him to just sit there and shutup during probing interviews), the left out Bernanke's next statement. ""My forecasting record is about the same as the win-loss record of the Washington Nationals." Thanks, Ben, so even though you've been wrong most of the time, you'll just keep throwing out ridiculous statements like the economy should recover in 9 months.

Obviously, the CEOs put their collective brain cell together last week and thought they'd give disinformation another run. Jamie Dimon, apparently following some sort of schedule, spewed off about how short-sellers and "the vilification of corporate America" is killing the market. Senators are again clamoring for the return of the "uptick" rule, which, by the way, comes in 3 cent increments, not penny increments like actual stocks trade. Haven't we suffered through all of this BS before? What about last summer, and then the fall, when we banned short-selling financials entirely? We've already proven that notion to be false, as have multiple studies from the NBER.

Remember Wells Fargo and a JPM last July confirming their strong dividend, GE, Berkshire? What's happened since? Dividends slashed to pennies (and that is just for show, no way in the world can these banks afford to pay dividends). BH and GE lose their AAA ratings and the markets go up. This should be the nail in the coffin, confirmation that the game is over.

Keep in mind what our government is trying to do, stimulate spending. That is their only way of propping up our economy. Don't buy in. Save, cut back, work more if it gets you more, sell or give away what you don't need. If Jim Rogers is correct that it will be the farmers driving Lamborghinis and the traders driving cabs, we're all going to have to do with a lot less.

1 comment:

Tiger Coach said...

Ax... A true concerted effort to manipulate the market. Stock options to the upside were shot, so this is the way for the executives to make money the "old-fashioned" way.

Note too, that the credibility factor has gone un-chequed. This suggests that if a Ken Lewis type is willing to lie... the sheeple are always willing to believe him. Magnify that belief by the likes of the CNBC cheerleaders, and you have the foundation of excitement... but also, a short-lived rally.

Don't worry, there is already a concerted effort to remove Lewis... But as for the massive manipulation going on, it will only take a small prick from the BRIC nations (over the weekend) and this market is done!!!

Let's find if they are long or short on the market!!!