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Sunday, September 28, 2008

It's Sunday - Time For Another Bailout

All the news I have seen is that the bailout is just in need of a few details to be hammered out. It is truly amazing how long and drawn out the battles in Congress get over small amounts of money, yet when it comes to draining the Treasury, they ram it through without even reading it. It is also amazing that part of the reason this is being rammed through is so Congress can recess on time. I don't have to tell those of you who have real jobs that that's now how it works in the real world. If you need more time to finish your work, you stay late, or else.

I have been trying to play different scenarios in my head to see if I can guess which way the market will go, but to tell the truth, I have no idea which way this market is going, If it fails (unlikely) and Congress allows the banking system to collapse, I imagine we will see massive deleveraging, a collapse of the housing and credit markets, and a stock market crash. It sounds harsh, but it seems to me to be the best way we can go, both from a moral and a financial standpoint. The banking system we have now is broken, sort of the way other industries broke in the past. What happens then? A new industry comes in to fill the void. At one time RCA was the Google of it's day. It wasn't "too big to fail", and when it did, others came forward to take it;s place. That's what will happen when the banks as we know them today are gone, better, more modern companies will take their places. That is, without Government interference.

What happens if the bailout goes through as Paulson wrote it (more likely)? Most think the market will rallly, and I suspect it will short term, but longer term we will probably see much the same as we have since January, pretty much range bound. I can't imagine inflation not going ballistic, but if course we will get bs numbers from the Government. The worst part is that the people that got us into this will see another opportunity to do exactly the same thing.

The Market has a funny way of doing exactly what everyone expects it not to do, making all the prognosticators look like idiots. That's why it's so important to learn to read charts.

I have the earnings sheet updated. I did find a couple of pretty big errors in it, and I wouldn't be surprised if there were a couple more, but I will continue to post updates as I search out the errors. There is one confirmed report for tomorrow, CALM.

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