Banks. The market interpreted Citi’s bailout as a signal that the government will not let large banks fail. I am not at all sure about this approach. The country has entered a phase that defies my understanding. Do we really have enough money to do all of this? I have listened to the argument that these bailouts amount to only 4-5% of our GDP. But, is that really true? Whose calculators are they using, Paulson’s?
Stocks. Almost 900 points in two days. We have gone from oversold to overbought. This confirms my earlier thesis that to expect a buy and hold equities strategy right now is dangerous. On the other hand, it is a day traders dream. Throwing darts at almost anything over the last two trading days netted traders huge returns. But watch for a down day around the corner. There will still be 10% unemployment, corporate earnings will stink, small banks will fail or be merged into weak sisters and consumers are still traumatized. I am keeping some positions overnight but have tight stops on everything.
Travel. Tomorrow is a travel day for me so no posts. Hope that you and yours have a wonderful Thanksgiving. It is my favorite holiday!
