Wednesday, January 21, 2009

Bailout the bailout!

Market jumped like wild fire today on the belief that the new plan of action is the same as the old plan of action! Oouch!

The government is basically saying they will pump as much money into the banks as is necessary. I'm not entirely sure what the point is, it hasn't worked one bit so far, why they feel it'll work now is beyond me. Frankly, its downright scary. For this citizen, my worst economic fears seem not so far away at this point. There is absolutely no way I can see it working. Now they are talking another 2 to 3 TRILLION! I mean, its really insane, but hey, what do I know, maybe they know what they are doing! Let us pray. Dear G*d, please please please let it work!

I think thats really our new policy, print money...and prayer!


Guitner should not be confirmed. It seems pretty clear the guy is a liar and lacks ethics to me. How could he not know to pay his taxes? This is the guy we want running a large part of our economic policy? Oy Vey. OY VEYYYYYYYYYYY!

Yes, and my dog ate my homework, my grandmother lost my homework, you won't get pregant if we do it standing up, and the check is in the mail!

I'm very impressed by Obama's actions so far. Some of it is for "show", but so what? When was the last time a president got his staff to take a pay freeze the 1st day on the job? And, when was the last time we had any real rules regarding lobbyists? So, while I definately question this "spend at all costs" strategy, and highly doubt it has any real shot of working long term, I do have to like the guys intentions. Thing is, I'm humble enough, I think, to know that I could be wrong. It's possible that these things will work. I sure do hope so. I just don't see how doing what's been done up til now to failed results and expecting it to work because we throw MORE money at the problem is a good idea. The only thing it may do, in my opinion, is do what it did today, which is falsely drive up the market.

Today I lost money. The action today took me by surprise. For the 1st time all year we didn't fade the gap for a while. Then we did and then we got this news about the "plan" and the market took off. I came into the day short so I started down and made a nice comeback but not enough to dig myself out of the ditch I started with.

I am not strong here. I made the mistake to force a couple of trades today, and when I do that I usually regret it for myself and for clients.

I think we could get a move higher from here into the "plan" on the hopes that they will completely bail out the banks, which they might. These are crazy times, the market isn't natural right now. I'm scaling back my trade lot size until I get more clarity. I've made a lot of money so far this year, my account is up about 50% overall so far. I'm very happy with that, the last thing I want to do is give it back with trades I am unsure of.

It's interesting to me, I get emails when I'm not making a ton of calls with people upset because they want more calls. Usually I call so much that some people say I call, well, too much! People have been racking up, but expectations are tough to live up to if you aren't realistic. Or, if you force trades.

Let's see what shakes here. If we run into the "plan" then chances are we'll sell it off and thats a much stronger trade then guessing here. I think we have to retest the 7500 level soon. That's why this is tough, I would be bullish here off today's move for at least a trade, but I think we have to retest those lows, so hence the not strong stance here.

Very choppy trading, folks, you have to be smart and nimble and not get attached to your positions too heavily if you are wrong. Yesterday we were down 300, today up 300. I mean, thats INSANE, but thats why this is a total trading market.

If I wasn't working, I'd take a couple days off to see what shakes here. Remember, part of being a sucessful trader is picking your spots. Don't trade just to trade, its a good way to lose your money fast. I went home pretty flat tonight, actually hedged, some long and some puts. Watch BIDU today, its been lagging and could get a very big squeeze into GOOG earnings if the market is strong.

Nuff said!

See ya later, RULE!



FACTOR R said...

hey , it's funny waxie I am a new customer and i was orange belt then black and now ninja today was my first time in the chat room i was happy to be part of TF and I still happy today i jump in the put that you gave us and guess what they all made money I did not jump out but tomorrow it is another day and I hope we got a push down here then we do not get hurt please keep up the good work happy to be here !!! and let's make a kati go whatever you say hahahaha !

In Debt We Trust said...

Waxie - Geithner is another GS stooge.

He was on the NY Fed Reserve Board when they voted to bail out AIG and save Paulson's slush fund accounts.

Do you really think things will change? I mean - the last GS stooge worked so well so why not pick another? Govt never learns.

dutch said...


I've been a trial member for almost two weeks- need to make a decision to join soon. Have enjoyed reading your blog.

Read your blog yesterday (1/21/09 "
Bailout the bailout"). I agree that it is crazy how the government is dumping trillions into this economic mess with nothing to show for it - we are mortgaging our children's future! What I was struck by was your failure to connect the dots.

On the one hand you have been going on sometime now about the government's irresponsibility (which I agree with your assessment), and then in the next sentence you say how "very impressed I am with Obama's actions so far." The government actions which you criticize are totally consistent with Obama's philosphy and direction for this country. He has every intent of spending trillions and has even said that trillion dollar deficits will be the norm for years to come. In fact just before he took office he requested President Bush to release another $350 Billion in bailout money. Do you not see the disconnect? Why don't you hold him accountable for this? He (and many others) are pushing this insanity that you rightfully condemn.

You call Timothy Guitner a liar and not fit to be confirmed. Who do you think is responsible for nominating Guitner? What does that say about Obama's judgement and why are you not holding him responsible for this poor choice?

President Obama announced a pay freeze for his staff. So what - when is the last time someone reported to work and expected a pay raise on the first day? This appears to be just for PR purposes, symbolism over substance. A pay freeze (and we'll see a year from now if there really is a pay freeze) is just a drop in the bucket compared to the $160 million spent for the inauguration - seems wildly extravagant and could have been used for many other purposes but I don't hear anyone in the media complaining or pointing out the contradiction.

Let's use discernment and hold all our leaders (Republican, Democrat, conservative, liberal) accountable for their actions. Let's not just listen to HOW they say things but WHAT they say and make sure their actions are consistent with their words. Let's not compromise our demand for accountability just because history has been made.