Tuesday Outlook: Bailout Blues

What’s so good about putting up $7.4 trillion of taxpayer money to backstop stupid banks? Then it’s said Obama wants a $700 billion stimulus plan immediately. These amounts are beyond mind-numbing. But you know something, I’m no different than you--ticked off.

I wonder how much Citigroup (C) stock Sandy Weill and Robert Rubin have sold over the past few years. Whatever misbegotten gains they’ve received should be turned over to taxpayers. But doing so would involve the Treasury recycling it back to Citigroup. Silly me!

Okay, all this isn’t my job. Let’s move to the markets where investors were overjoyed by the prospect of more bailouts that should lead to future inflation. Always remember, when deflation presents itself, politicians and policy makers will choose inflation over tough love every time.

Today’s bullish action is follow-through from Friday’s end-of-day options expiration/Geithner rally combined with the Citigroup bailout. Remember, stocks can inflate from reckless policy decisions and with markets deeply oversold a rally shouldn’t shock anyone.

Surprisingly, volume was just better than average. Breadth may have put in a positive 90/10 day which others will make a big deal about. But we can’t tell from the data below yet.

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