Tuesday Outlook: Commodities, Emerging Markets, More

Return to Page 1 - Bailout Brouhaha





















































This rescue effort has been bungled. What if your teenage son came to you and said, “Dad, I need to borrow a few thousand dollars.” You would reply, “What for?” And he might say, “Well, trust me dad, it’s for the good of the family.” You might say, if your temper was restrained, “Well, son, thanks for trying to help us out; but, would you mind giving us some details?” And he says, “I’m sorry, dad, just give me the money and I’ll spend it wisely…you can trust me.” End of conversation.

Well, I suppose it’s really not going quite, like that but folks are bugged at the abruptness of everything. Nevertheless, this crisis has been building for a long time. The ham-handedness of the entire process is extraordinary including the administration presentation and the speaker’s stupid thoughtless grandstanding.

We’ll have another four days to see how bad things will get. One thing most haven’t given much thought to is shorting rules in place mean there isn’t as much buying power. Shorts have to cover at some point which translates to buying.

It’s a fine mess we’re in. I’m grateful for large cash balances we maintain and some short positions. But you can’t boast until you bank [where?] book them.


Disclosure: Among other issues the ETF Digest maintains long or short positions in: SDS, QID, SIJ, SMN, SDP, IEF, GLD, DGP, EFA, EFU, EEM, EEV and FXI.

Comments

[MKW:]

I'm sorry, Pelosi's speech was inappropriate, but any Republican congresspeople who decided to change their vote (and in the process risk setting dynamite at the foundation of the economy) due to it need to be demoted to something more appropriate to their judgment and maturity level. Junior High School comes to mind.

2008 Sep 30 08:35 AM

[CTMike:]

Sorry MKW, I'm with Dave. We are getting noting but crises sound bites; remember Y2k, and Iraq/WMD. I thought the financial world would come to an end Monday or no later than Tuesday if the bail out wasn't passed. Looks kind of like it did last week and its Tuesday. Oh, now we have until Thursday or Friday. If the financial system is frozen, it may well be because they want to see how much free taxpayer money that can get before they make any decision on how to fix the problem themselves. AND, MKW, many years of experience in the corporate world has shown me that when somebody tries to intimidate me into doing something that I would rather not, its because their motives are suspicious/disingenuou... and they don't want you to know the details/facts! Thank you Nancy, you are such a wonderful leader.

2008 Sep 30 08:53 AM

[herbert hoover:]

Nancy hurt my feelings so I'm going to let 2$ trillion go up in smoke???????? Maybe we need more mature congressmen?

2008 Sep 30 08:57 AM

[Illusional ...:]

I don't think that is the case, since probably the entire congress needs to be examined over their lack of oversight before the "crisis". It always amazes me how these people can get to congress but now we can evaluate whether these men and women can really lead. Hopefully, this lesson will not be lost within 2 weeks by the media.

I'm against the bailout as well, and I hold stocks also. I think a correction is more beneficial to the global economy than the bailout. Corrections are needed to right inflated prices. Besides, the consolidation of banks probably mean that the good banks probably did enough homework to avoid going out of business anyway, so why do we need a 700 billion blank check now? Fishy right?

2008 Sep 30 09:15 AM

[CTMike:]

If you really think you have a voice in Washington, try contacting your Representative. I got this message just a few minutes ago - - and you trust them to know what they are doing on anything!

Messaging Service Unavailable
The House of Representatives is currently experiencing an extraordinarily high amount of email traffic. The Write Your Representative function is therefore intermittantly available. While we realize communicating to your Members of Congress is critical, we suggest attempting to do so at a later time, when demand is not so high. System engineers are working to resolve this issue and we appreciate your patience.

2008 Sep 30 09:29 AM

[Carl Spackler:]

This guy always does some great posts - always a must read.

2008 Sep 30 09:58 AM

[parnelli96:]

Kinda bummed they didn't post Dave's image....check it out on his homepage. My fave is when he posts the "surrender dorothy" image.

2008 Sep 30 10:01 AM

[Scared Stiff:]

Yeah... where's the whole first page??

I, for one, am glad the republicans threw their little tantrum. If hurting their little feelings is what it takes for them to recover their courage, maybe we need more of it.

2008 Sep 30 10:30 AM

[fg144331:]

Good reading from all of you. My comment: WE MUST VOTE OUT ALL INCUMBENTS not matter which party they are in. Herbert Hoover 'above' made a great comment. WATCH HOW YOU VOTE!! Seems that we are always the loosers.

2008 Sep 30 10:50 AM

[poet1:]

1-202-224-3121 call congress. If u were a bank and you'd get 20 cents on the dollar, wouldn't you wait ( why credit is frozen) to see if the dummies in DC were gonna bail u out & give you 40 cents on the dollar?
let them go bankrupt & bail out the shareholders. marx is loving this.

2008 Sep 30 01:25 PM

[Brahm:]

David Fry presents excellent analysis as usual. However, dumping on the speaker ain't cute at all. Perhaps, dumping on the scrumptious crowd that implicitly said "She hurt our feelings and exposed our hypocrisy of the last 25 years of pinhead economics" is probably more to the point.

2008 Oct 01 08:49 AM

[johnthebear:]

"WE MUST VOTE OUT ALL INCUMBENTS no matter which party they are in."

There can be no change with a "new" president, with the same bunch of FOOLS that got us in the mess.

2008 Oct 01 09:01 AM

[roswell007:]

Dems create crisis by insulting Reps.

McCain is Herbert Hoover. Everyone scared.

Obama wins.

2008 Oct 01 12:35 PM

[verniman:]

David Fry show us short ETF's graphics and finally we make money!!!

2008 Oct 01 01:00 PM

[verniman:]

Yes!!!, show us short ETF's graphics, please!!!

2008 Oct 01 01:05 PM

[Pessimistic...:]

gonna use a metaphore here.. the farmer and his family in the front office should have kept a sharper eye on the hen house. I do not think we would be in conversations of such split opinions had our nation's leaders kept their eye on the prize. Oh, the prize.. our financial markets.
I know, it is hard to think about Gov't monitoring our financial system which to a certain extent they do, but right now it appears that they did not do enough..

2008 Oct 01 10:42 PM