6/17/2009

The market has sold off as expected. Currently in a bounce but should soon resume lower piercing the spx 900 level. Options expiration week can bring hard to read surprises.

Quote of the day, courtesy of Karl ‘No Slave To Fashion’ Denninger:

Government, despite their so-called “new proposal” has refused to take the steps that are necessary to resolve this crisis and return us to a stable economic base.
The reason for this is simple: Government is both beholden to and stuffed to the gills with those who made the bad decisions, and forcing those people to eat their bad investments is considered politically unacceptable.
We therefore will do this “the hard way”, just like we did in the 1930s.
Buckle up - this road might get “a little rough.”

Unfortunately, the ones who made the decisions which are at the root of our financial problems are still in charge. While the markets ran off the Lehmans and Bear Stearns they were merely players in the game not the rule makers. Losses will correct bad behavior, unfortunately we don't have such remedies in government.