BAILOUT: POWER RUSE IN DISGUISE
By Grant Hall
Grant Hall manages an Investment/Trading account for a private company. As of October 24, 2008, the account has a net loss of 1.45 % for 2008.
CONFESSIONS OF A STOCK TRADER
Making mistakes in a business as complicated as buying and selling stocks is to be expected-on both the macro (market direction) and micro (stock selection) level. My article, Dollar Crisis Opportunities-Risky Business (Hall, 2008) is one such example. In April, 2008, I proclaimed a new bull market in stocks and I was dead wrong.
While we capitalized on the leaders of the day-for weeks and sold within days-or hours off their tops, this rally, following a third leg down by the market indexes, resumed its downtrend and then another confirmed uptrend began.
Once again, active, market leading stocks were bought with most positions being closed out with small losses. Signs of trouble were everywhere as breakout after breakout failed.
Another leg down began soon thereafter-prior to, during and after the infamous 700 billion dollar bailout package was passed. This time, the downtrend meant business and continues and nothing is being left standing. Leading stocks attempting to set up to move higher are being picked off one by one after the follow through (O’Neil, 2002) failed and market indexes including the S&P 500, Dow Jones Industrial Average, NASDAQ Composite Index, NASDAQ 100, New York Stock Exchange Composite Index, SOX, Russell 2000 and other indices continue to make new closing lows (Daily Graphs, 2008) weeks after the new powers that claim to be passed record-breaking, unprecedented, unproven, government-style, spending (at the expense of you and yours) intervention into the once FREE market system.
BAILOUT OR A RUSE FOR POWER
Clearly, this is a band of criminals-in this writer’s very experienced opinion like we’ve never witnessed. Indeed, so arrogant are they, that prior to doing an empirical, feasibility study or heeding the counsel of those experienced (except for their own in-house cronies- in this writer’s belief and opinion) in the business of markets, they rushed off, pulled out a number of 700 billion dollars-without rationale or explanation and promised your government representatives that the markets-housing and stocks, would suffer and suffer if such funds were not given IMMEDIATELY to their, unstudied cause. And the aforementioned representatives passed the “crime bill” of the century-in this writer’s opinion-a bailout that will not bail out either housing or stocks as markets will do what they have to do-eventually.
Government intervention only makes the normal problem of bear markets-no matter how severe, become more serious. Case in point; the Japan stock and real estate markets.
Since anyone with market study and experience would know that no man or entity-not even a government can prop up a real bear market (Loeb, 2007) to any degree for any length of time, it would seem that this group-headed by an ex-stock broker chief and a college professor and “student” of the great depression, would surely know the difference. Maybe they did.
With the Treasury set to make unsound investment decisions by buying illiquid losers in the form of unmarketable securities-cousins of pink sheet, penny stocks-all the while running interference for selected investment banks and financial firms, it’s clear that power is the objective here and that the bailout is merely a ruse to socialize the entire once-free market financial system in the United States of America. (in this writer’s opinion)
Welcome to the new Amerika.
1.Australasian Investment Review, Markets Hammered as Bailout Fails, www.ArticlesBase.com September 30, 2008
2.Daily Graphs Online, 2008, www.DailyGraphs.com
3.Ellis, David and Lubby, Taimi, Problem Bank List Keeps Growing, www.CNN.com 2008
4.Graham, Jed, Bigger Mortgage Fix Needed FDIC Says, To Halt Foreclosures, Investors Business Daily, Vol. 25, No. 140, Friday, October 24, 2008
5.Hall, Grant, Dollar Crisis Opportunities-Risky Business, www.RepublicBroadcasting.org April 27, 2008
6.Hall, Grant, Privacy Crisis; Identity Theft Prevention Plan and Guide to Anonymous Living, James Clark King, 2006, www.PrivacyCrisis.com
7.Loeb, Gerald, Your Battle for Investment Survival, Wiley, 2007
8.O’Neil, William J., How to Make Money in Stocks; A Winning System in Good Times or Bad, McGraw-Hill, 3rd Edition, 2002
Copyright, James Clark King, LLC, October 24, 2008