Dead Cat Bounce
OK I know I said I was not going to write about the markets anymore but jumpin’ Jesus on a rubber crutch this is madness. Don’t get too comfortable with today’s rally, it wont last. I would be very surprised to see it last throught the day tomorrow. Throw a dead cat off a roof and it will bounce but it will still be dead.
You and I each shelled out $283 dollars to AIG yesterday to “bail them out”. Too late them money has already been stolen and is now in the form of yachts, Gulfstreams and mansions in thHamptons. Paluson is just taking care of his buddies at the country club. Why not, not his money. We can print more that will be worth less than the original money that is already gone.
Now we have the SEC considering banning short selling. I am sure to the simpletons out there who blame short sellers for their bad investment decisions then this is good news. Well if you are a fan of free markets it is not. If you are a responsible investor who hedges his portfolio it is not. If you are a fan of liquidity in the markets it is not. Short sellers had nothing to do with the collapse of Lehman, no one wanted to buy Lehman for any amount of money. No one, it was a toxic dead cat. Dick Fuld ran that ship into an iceberg years ago, it finally sunk. AIG could not borrow money from anyone. Why? Because they have no free assets to pledge for a bridge loan. No one would lend them money because they knew there is no chance of it being payed back. None. Short sellers didn’t cause that, blind probably paid off regulators did, greedy executives who sucked the coffers dry did. WaMu, no one will buy WaMu because there is nothing to buy, no bidders. Free market at work there. Who wants a dead cat?
America is now a socialist country, like France. Thanks Hank, now I can’t even make fun of France.
