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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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Friday, May 8, 2009

Freaky Friday

I expect Friday to be not fun.....for anyone.

Thursday after hours, Fed announced stress test results. Also banks announced more stock offerings to dilute their stock. MS, WFC, BOA, Citibank, are all making public offerings of debt, either as stock or as bonds.
Why? I'll ASSUME (no proof here) the Fed said either we announce you must raise XXX cash, or you can pre-empt us by announcing your raising cash.

In any event, its the same thing. So the "good news" is, the stress test didn't announce anything earth shattering. The bad news is, stock dilution for many banks. The stress test I am sure will be critiqued heavily for the next week. And I'm pretty sure the bloggers will basically state the stress test was garbage. And in a few months the government will have to look again what else can it do to generate faith in the banks. Of course making the banks properly mark the valuation of the debt obligations they hold is plain crazy talk! So some other game will be created to try to fool everyone that its all OK.

As for next few days. My post stands, I think we are near a top. I just don't expect any "top" to be easy, so some games will be played for a day or two.

I did say I would post EOD Thursday for my lottery tickets. If Friday these open UP big, it may be a great chance to still get in. If you want to buy 500 shares, buy 200. And buy up to 300 more if/as they fall more.

Point in, buying some high risk stock doesn't have to be all in at one time.

Prices as of Thursday 5/7/09 close prices
FAZ - 3x short financial markets - Price 4.75/5.67
SRS - Double short real estate - Price 20.15/23.16
TZA - 3x short Russell index - price 24.95/27.83

For more about the stress test, and other news, read Mish! (click) He is a real news, no spin, god. :)

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