Thursday, August 7, 2008

Does the FED and Treasury Have a Plan B? Do You?

Hello to one and all. I am sorry for the very light blogging, but I have been playing tennis, setting up contractors for various projects, busy at work, and just trying to enjoy the last month of summer. I know there are no hard feelings. I do miss writing material almost every day though. Times are very exciting indeed!

Honestly, there is so much good stuff out there I could not even offer much anyway. Things are developing so fast that by the time I get home issues have been covered 10 times till Tuesday and better than I could have. I still try though!

Brett Favre Drama
I know, sports are usually left out here, but I just do not get all the ruckus over Brett Favre wanting to continue playing. Aaron Rodgers has been groomed to be Green Bay's next quarterback for like 5 years. The Packers pay him well, and the assumption was that Favre would be done at some soon point. He kept playing, and playing, and playing well I might add. After a brutal cold game in the NFC title game that he lost, Favre "retired". He later felt that was a bit quick and wants to play.

So whats the problem? If the Packers want to go with Rodgers, release Favre outright. It is fair to Rodgers and Favre that way. All the baloney about training camps and the like was dumb and hurt both Favre and the Packers organization. Favre is now set for the Jets, and I wish him well. Ask Chad Pennington how good that offensive line of New York is though, and I think Favre will want to retire somewhere around week 10!

Does the FED and Treasury Have a Plan B? Do You?
The basic plan of the FED and treasury has been fairly well fleshed out through analysis, statements by officials, and old fashioned guessing. The basic plan the geniuses came up with was:
-Manipulate stock prices of selected financial companies to bolster those stock prices so that those firms could then sell tons of stock (diluting hopelessly current shareholders) in order to raise capital (not that they need it mind you, ask them and they will tell ya!) to shore up the bottom lines in the face of more loan losses.
-Crush oil prices to at least $100, hopefully more (are they targeting ruthless oil shorts I wonder??) to assuage the public about energy prices.
-Make statements about inflation fighting and try not to laugh out loud while doing it.
-Extend until forever total access to the FED lending windows (too many to name) to any bank still open (sorry BSC and IMB, our bad!) so money still flows.
-Pray for a miracle.

So far the oil price trick seems to be going well, but the other points are failing. Bank stocks, while sometimes rallying strong, are still in firm downtrends. Window lending is problematic as Citigroup has already had to take back some toxic stuff they stashed there. I have advice for the FED, MOST of the stuff you get is the worst of what is out there, hahahaha! The miracle may come, but time is running out.

So in the face of accelerating Alt-A loan losses, higher unemployment, bla bla bla. I don't think I need to hash out the data in bit by bit fashion. Numbers only matter at this point as trading points, the trend is now firmly in place. Deflation is at hand and the particulars of a jobs report, home sales, or gas inventories makes no difference.

So from where I sit, I ask does the FED and Treasury have a plan B? I mean are we going to be treated like adults at some point and have the real deal laid out along with a responsible plan of action? One can dream. With an election at hand I fully expect more government intervention gymnastics and even outright data manipulation. Call me a lunatic, but if I told you last year that some short trading would be outlawed and the Treasury would be authorized to buy UNLIMITED stocks of certain companies you would have called me much worse. Of course you would have looked stupid and foolish now, but time is a harsh mistress, ya know?

So what is the plan B? I am sure they do not have one. So now I ask, do you? Now may be a good time to review options and strategies for severe disruptions in money matters. I am not calling for the end of the world, but a little prudence now may make you able to sleep later.

It is getting ugly, and under the surface you can feel a new palpable fear amongst the upper echelon of leadership. Stay smart!

Have a good night.

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