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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
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Monday, October 27, 2008

Depressing News

Yes it's once again time to bring out the depressing news. If the mainstream media won't focus on it, someone has to! :)

Federal "bailout money" may be used by banks as leverage to buy out other banks. My Spin The government spin is if a "healthy" bank (if its healthy, why does it need federal funds?) buys a troubled bank, it helps the consumer. To me it make zero sense that companies than need bailout money are expanding their influence/business? But what do I know?

Insurers and banks face billions in loses in Credit Default swaps My Spin: A 62 trillion dollar unregulated credit derivatives market is bound to bring losses that stagger the imagination. It doesn't take a huge leap to be concerned that this will adversely affect the market.

Korean Bank to use USA Federal money for assistance. My Spin: Ben Bernanke is trying hard to stop something he can't. Mr. Bush needs to step up to the plate, lead for 2 minutes and reign in the lending machine. Also, I need to lose 100 lbs. Both have same probability of occurring.

Moody's downgrades GM to deep junk bond status, and the Treasury to expand helping (bailout?) from Investment banks, Banks, Insurance companies (AIG), bond insurers (ABK), and now car manufacturers GM & Chrysler. My Spin: I blogged on this in the past, with all the cash being focused on financial industry I question if the government will have enough resources to help the industry that actually produces products. GM will eventually be a government business or foreign owned. I still contend Bennigans should apply for a Fed "loan" to re-open its business.

Bernanke announces any company in the world with a stock value above 1 dollar is insured from failure using USA Taxpayer money. OK, you got me, I made this one up, just checking to see if you where paying attention.

Nasdaq suspends exchange delisting rules. Why is this needed? When staple companies like AIG see their stock go below a buck a share, it would add fuel to the fire to have it delisted. My Spin: This fixes nothing, except less scary headlines.

Thailand to buy oil with rice. My Spin: Breaking down trading to a barter system is not good sign. Maybe the USA can export SUV's, and McMansions for oil.....

Britain may need ZERO percent interest rate to spurn growth
. My Spin: Like an older brother (like Fredo) Britain is probably doing what it's told to give Bernanke room to not seem crazy when he does it first. FREE money does not SOLVE ANYTHING. It will hurt! Hence my Gold miner play. Money will have a COST, either by interest rates or devaluation!

Goldman Sachs sought Citibank to take GS over, but was rebuked. My Spin: This stock is screaming short me. Why else would GS want to be taken over?

AIG has about eight weeks of cash left. My Spin: AIG goes down, we will see new DOW lows immediately.

Japan's stock market hits 26 YEAR low! My Spin: For all readers who believe "buy and hold" is the way to a secure retirement, Japan is an example of being prepared to hold for 40 years to eek out some sort of profit, and 26 years to break even (discounting inflation)

NYTimes has an interesting article on how the government plans to encourage banks to use Government money to finance mergers. My Spin: I thought one of the problems was institutions where "too big to fail". Isn't this going to fuel this problem? And I thought Republicans where against Corporate Welfare and Government meddling in business. This administration is taking this to a level that was un-imaginable 2 months ago.

My Closing Spin: We either have seen a near term bottom or we are going to crash from here. But then again, I keep thinking that for the last week. Eventually I'll be right one way or the other. :)

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