Monday Morning Sickness

The market has had some time to digest Paulson's bailout plan, and is puking. It seems that it gives Paulson way too much power, and the $700B price tag is not true. From the text of the proposal sent to Congress:


The Secretarys authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time. (emphasis mine).

That means that Paulson can buy $700B in distressed assets, sell them for pennies on the dollar to Goldman Sachs, and turn around and buy another $700B. The taxpayer eats the loss.

The Dollar is down, oil is up, and PDO, the newest addition to the earnings sheet, is up 30% today. The SPX has bounced off 1225, and may be headed for a restest. Oddly enoughm, the VIX dis dropping, down to 31. There are 2 breakouts on my scan, AVY and DMND. Neither looks terribly promising.