Saturday, September 20, 2008


The FED and the US Treasury have done it again. Hooray ! We’ve been saved!

Markets around the world rallied furiously and confidence has been magically restored. The Financial media is talking about how wonderful the whole scheme is!
Restoring confidence and punishing manipulative shortsellers!!

At the end of the day, the markets have rallied and everyone can have a good weekend. Everyone except the FED and the Treasury, who are going to have to come up with a detailed plan soon, (if they haven’t done so already.)

Well here are the Free Market guidelines they are working by -

Privatize Profits, Socialize Risk and losses.

Stop short selling in financial stocks; Blame the short sellers, and not the incompetent and bungling regulators, Fed, Treasury and overpaid Investment Bank CEO’s that got us into this mess in the first place.
Surprising that Crude Oil futures were not suspended on grounds of market manipulation !

Bailout everyone who took on more risk than they could cope with.

Punish Creditworthy debtors by rewarding defaulters and leveraged overtraders.

Conduct Bailouts on a case by case basis, randomly deciding who is to big to (let) fail.

Coming to the Story of the Emperor’s new clothes, starring Hank Paulson and Ben Bernanke as 'the illustrious tailors'.
Heres the summary from Wikipedia

“An emperor who cares too much about clothes hires two swindlers who promise him the finest suit of clothes from the most beautiful cloth. This cloth, they tell him, is invisible to anyone who was either stupid or unfit for his position. The Emperor cannot see the (non-existent) cloth, but pretends that he can for fear of appearing stupid; his ministers do the same. When the swindlers report that the suit is finished, they dress him in mime. The Emperor then goes on a procession through the capital showing off his new "clothes". During the course of the procession, a small child cries out, "But he has nothing on!" The crowd realizes the child is telling the truth. The Emperor, however, holds his head high and continues the procession.”

The Question is : How long can this go on??
Delaying tactics may postpone the day of judgement for a while, and although the authorities may promise you that they are taking unprecedented measures under extraordinary circumstances,----we may be running out of road!!

Gold has survived a most volatile week, closing around $ 872 today on news of the continuing credit crisis. Increases in money supply and ‘fighting insolvency with liquidity’ are going the be factors that will drive gold prices still higher

The coming week or should I say weekend should be interesting!

Some excellent coverage of the volatile week -

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