Bad news pervades everywhere we turn!
POTC senses a climactic sell-off is upon us. The question now is whether Wednesday's sell-off (should it happen) will be met with a Geithner policy reflex rally. That's the $64,000 poser. The rally could take us into Thursday & perhaps Friday's option expiration IF something substantive were announced by Geithner or the SEC.
If Wednesday's sell-off (once again, should it occur) is not met with any clarity from Geithner or the SEC, and the bounce doesn't happen, the pain will probably accelerate through Friday's close. We are very skeptical about anything positive from Geithner after witnessing President Obama's 100% partisan spending act. It's difficult for POTC to make a short-term directional call this Tuesday night, and we are saddened by the latest developments out of Washington.
To our loyal forward-thinkers we suggest not going long ANY financial stocks as the nationalization of some banks seems imminent. The new administration is effectively ignorant to the needs of the free market system in lower Manhattan, which in turn affects the average Joe on main street.
The administration has dropped the ball with their spending act. The fact President Obama chose to be a Chicago precinct captain/organizer after Harvard is coming home to roost. This reality finally has many Wall Street experts very disturbed. As a result, everyone who has money in the capital markets today is more confused and less confident by the hour...
The policies so far have reflected an anti private sector bent. We thought the right thing to do was to freeze corporate & small business tax rates before expanding/forcing big government type programs.
Although POTC respects President Obama's intellect in regard to opening up the lines of communication with foreign countries, we STRONGLY disagree with his public tirade against Wall Street banks just 2 weeks ago, as he attempted to build public support against Wall Street by announcing "now is not the time for profits". This appears to have ruined President Obama's credibility with many capitalists who supported his candidacy.
POTC feels it is a calamity and a paradox to tear down the Street that financed and made the United States & the world a great place for over 100 years. Expanding government programs on an unprecedented scale will backfire in the long-run, as big brother attempts to manipulate the free market system.
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President Obama is failing the American people by siding with truculent Speaker Pelosi and Senate majority leader Reid. It was our initial belief that the new President would be a lot more bipartisan and we never fathomed he would publicly diss Wall Street banks and then parade the bankers in front of Congress. Are bankers more to blame than the politicians who did away with Glass Steagall in 1999 and opened the door for various exotics/derivatives to trade?
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POTC thought President Obama and his "change" cabinet would do everything and anything to build Wall Street back up, not play a public psychological chess match against it. We are of the fiscally conservative belief that larger centralized governments, such as that ignited by the $800B spending act, develop bureaucratic classes that may be indifferent or even hostile to capitalism/commerce/free market system. Did we not get a whiff of that powerful government when the bankers were demoralized at the expense of mental midgets like
1) Maxine Waters (refers to bankers as "captains of the universe":
and 2) Michael Capuano, who is repulsively ignorant and rude:
http://voices.washingtonpost.com/economy-watch/2009/02/kanjorski_to_bankers_pay_us_ba.html?hpid=topnews
The President's psychology is flawed and he should have a closed door with the above mentioned Congressmen/women who unfortunately are representatives of "change"? Without Wall Street Mr. Obama, the United States is pointed to a very different type of capital structure, a structure that borders on socialism. POTC predicted in a January 12th post that the '08 scars would not heal quickly, yet we never envisioned such a partisan President in times of such crisis; (after clicking, please scroll down to Jan 12th piece); S&P could break that 741 ahead of our prediction:
2 comments:
Obama is a good speaker, but has no plan for capitalism. He only wants to expand programs for the unemployed. Unfortunately, Wall Street is the last thing on his political plate. His Govt ironically is Wall Street, so he did in fact make it to Wall Street after Harvard!
Good article men, J.P.
NEXT...
http://www.financialsense.com/editorials/engdahl/2009/0218.html
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